November 8, 2021


The process of building a house can be one of the most exciting ventures you can undertake. Dreaming about the perfect abode, working with an architect to design your dreams into reality, and thinking about all those perfect finishes is exciting! 

However,  if you are thinking about doing it you may be wondering “what is the cheapest way to build a house?” 

Well, the decision to build instead of buying an existing house is a good start. Contemplating a new build is enticing in a seller’s real estate market - one where home prices are high and inventory is low. It’s hard to find an existing home without getting into a bidding war, so building your own house becomes an interesting cost saving prospect.

However, this means you may sacrifice some design elements to save money as you shift to consider the most affordable way to build a house is. Alternatively, you might end up paying way too much to get so little. Beyond that frugal decision, there are several other ways to make sure you get the most value for the price as you undertake a new build.

Don’t overpay for your new home instead of educating yourself. In this article, we’ll discuss the cheapest way to build the house of your dreams while ensuring that the process doesn’t become a nightmare.

What Is The Cheapest Way To Build A House?


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There are several different aspects to consider when it comes to the least expensive way to build a home. 

No matter how much you think you can do on your own to save money, there are many different professionals you will likely have to employ.  This can include an architect, a general contractor, a plumber, an electrician, a roofer, an HVAC installer, and a concrete contractor, just to name a few. 

The most economical way to build a home is to do as much as you can yourself (more on that later), but it’s important to understand the key vendors you will need. Some categories to think about are design, lending services provided, and acquiring building materials (including saving money with reclaimed materials). Others include establishing a building budget, hiring your own builder, determining labor costs, construction, and interior design; the list goes on and on. 

It’s a lot to consider, but here we will dive into some of the most inexpensive ways to build a house to help you save money where you can and still get to build a home that’s right for you...and your budget. We can’t cover every element that helps you find the cheapest way to build a house, but let’s get you on that path with some of the most inexpensive ways to build a home, starting with your budget considerations. 

Have A Plan With A Budget 

We all want to know how to build a house cheaply and fast while still getting the home we want. That starts with a plan. If you just try and “wing it,” the result will be overpaying, taking longer than you want, and lamenting that you didn’t have the focus and discipline to find inexpensive ways to build a home during the entire process. 

Create a plan for a home that will be comfortable for you and your loved ones that won't break the bank. Don’t let a small budget deter you, though, as there are a lot of lending options available that you might not be aware of, including ones that can help you build a house with bad credit.

Essentially, building your own home also means building your own budget. That’s easier said than done, but it might be the most critical part of targeting the least expensive way to build a house.

Get Lots Of Quotes

We all look for the best deals when shopping online and feel a thrill when we save money and get something at a discount, leaving more money for other things. This doesn't just apply to phones, sunglasses, and free trials for streaming services, though. 

Shopping around for the best deals applies to your hunt for the cheapest house building method as well. Interview at least three general contractors (the project leader that hires and supervises all the various tradespeople) and get references who have worked with them so you can follow up and get some reviews. 

The cost varies for general contractors - usually between 5 and 15 percent of the project’s total cost - so it pays to shop around. Be clear with your goals upfront and make sure they know how to build a house within your budget and timeline. 

It’s essential to ensure the general contractor has the same philosophy about getting as many quotes as possible for each part of the job throughout the construction process. From concrete pouring for the basement to the finishing touches, they should know how to get the best deals at every point during the home building process. 

Keep The Building Simple

Regarding the home building process, keep it simple by building a conventional house from design to execution. Think squares and rectangles in the beginning as you decide how much square footage you need to keep things cost-effective. It makes sense that the least expensive way to build a house is also the simplest, right? 

This will also help the resale value, as any real estate agent will tell you the simpler the design, the more potential buyers there are interested. 

If you are analyzing every square foot and feel you need more space, build up instead of out. A two-level floor plan instead of a sprawling ranch means less foundation, offering the cheapest house building method. 

It may go without saying, but don't build more than your family needs when it comes to your own house. Smaller square footage is always the least expensive way to build a home. A tiny space might not seem like the best choice, but a tiny budget sure does.  

Focus On Materials

Focus On Materials

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When it comes to the materials you can use to make your home; the possibilities are endless. Each decision you make will provide opportunities to find inexpensive ways to build a house. 

Concrete or wood construction, gable roof or flat roof, wood floors or carpet, tile or laminate, appliances in the laundry room, the list goes on and on. Here’s a list of some cheap materials that can help you save money and keep a tight budget:

  • Brick: Cheap material, but sometimes increases labor costs. 
  • Recycled Wood: Cheaper than new lumber and added style. 
  • Corrugated Iron: Very cheap and lightweight, which reduces transportation costs. 
  • Concrete: Back in vogue from a style perspective and construction that will last forever.
  • Straw: This can be used for a simple roof and is dirt cheap but can increase labor costs.
  • Asphalt Shingles: There’s a litany of shingle options when you get to this point in the construction process, and going with asphalt shingles is often the cheapest way to build your roof.

Think out of the box too. Would a tiny home work? How about a house made from shipping containers? Container homes, tiny homes, and house kits (also known as kit houses where they deliver everything and you put it together like an IKEA bed) seem to be all the rage right now, so think about these innovative solutions and if they will work for you. 

When it comes to materials, think energy-efficient as well. High-efficiency windows, solar panels, and even utilizing wind energy are great opportunities for cost savings when it comes to home heating and cooling. 

There may even be financial incentives from your utility company or local government when you’re thinking about the cheapest ways to build a house; keep in mind that that means thinking about the most inexpensive way to maintain and live in it too.

Don’t Get Too Fancy With The Finishes

Not surprisingly, the cheapest houses don't have the most expensive finishes, so make sure your inexpensive house quest continues right to the finish line. Sorry, you can't build a house cheaply with a gold-plated toilet. That said, sometimes the most expensive finishes might not align with your taste anyways. 

Strike a balance between what is aesthetically pleasing to you but won't bust open your tight budget. You have probably compared building vs. buying a house, so start by thinking about what existing homes were lacking that you want to have in your new build.

What is really important? What doesn’t matter to you and might be an opportunity to save money by using cost-effective materials? Are hardwood floors that important to you or would a wood style laminate do just fine? Will some cheap wall panels work just as well as more costly options? 

Be creative, and don't be afraid to go back to the drawing board to brainstorm more affordable housing finishes if your budget is getting beat up by fancy first choices.

Let The Water Flow


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Saving money by zeroing on the cheapest way to build a house has a lot to do with rooms’ location. For example, keeping all the rooms that require water, like the kitchen, bathrooms, and laundry room, close to each other will provide cost savings when it comes to plumbing. 

Keep in mind that they can be close together by being stacked on top of each other on different floors or next to each other on the same floor.

Country Living

Whether you are part of the tiny home movement or envision a vast mansion, the land where you build needs to be considered as well. Talk to a real estate agent when you are ready to purchase land and find out what areas are the cheapest to build in. Spoiler alert: It’s not in the middle of a big city. 

A remote location and raw land that needs some work being developed are more likely to have a smaller price tag. Also, less land usually means less money, so if you are thinking of a tiny house, you can consider a tiny lot of land as well. 

Keep in mind that if you find a lot of land you like, you will need to have your home builders check it out before buying it to make sure it will work. That is unless you are a do-it-yourself owner builder, which we will dive into next. 

Cheapest Way To Build A House Yourself

Is it cheaper to build a house yourself? Yes, when it comes right down to it, the most affordable way to build a house is not to pay anyone else to do it for you. A home builder will be expensive, so slashing labor costs by doing the work with your own sweat and smarts is excellent for your building budget. 

If you have experience with architecture, design, foundations, framing, plumbing, electrical, and finishing work (just to name a few), you can do it all yourself, though it may take some time. 

Not sure about your skills for this big of an endeavor? Consider things like tiny houses, a house kit, or a container home. 

It’s not all or nothing, though, as you can pick and choose things to do yourself and things to outsource as you strive to find the cheapest way to build your own home. 

Maybe you could hire an architect and foundation expert and take it from there. Or perhaps you might handle everything but plumbing and electrical. Take each task into account when you plan and make choices based on your specific skill set, timeline, and preferences. 

At the very least, consider being your own general contractor. If you have experience with construction or at least an extensive network of friends who do, being your own contractor and overseeing the project is a great way to save some cash.

Make sure you know enough about each of the trades involved (plumbing, electrical, foundations, roofing, etc.), and if you don't, our website can provide a wealth of information.

Not sure you can do it while working your day job? Keep in mind that a lot of it can be done off-site. Things like researching plumbers and electricians, paying invoices, pricing materials, and all the other day-to-day tasks that go along with being your own contractor can be done from anywhere. 

Whether you do it all alone or just save labor expenses in certain spots, the pride of knowing you had a hand in building your own dream home.

Cheapest Way To Build A Small House


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Tiny homes, container homes, and the like are trending right now. According to a study by, the market size for container homes will reach $73,070.5 million by 2025, from $44,768.6 million in 2017. If you think this route is right for you, the money you save could be substantial. 

By nature, smaller houses are less expensive to build than big houses, but even after deciding on a tiny home build, there are more and less costly ways to go about it. The key here is to focus on the finishes. Even though the square footage is small, going for the highest-end finishes like hardwood floors or quartz countertops means a higher cost. 

The choices you make for the outside of the home will, of course, determine the cost as well. Savings from cheaper building materials are usually measured per square foot, so they won't be as significant from a raw numbers perspective in a tiny home compared to a conventional home. Still, on the quest for the cheapest way to build a house, every bit counts. 

The method of building a tiny house is not one size fits all. You can make it from scratch, so to speak, or get a little help in the beginning. Several manufacturers sell and deliver kit homes that come with blueprints, a foundation, and a list of all the materials and tools you will need to build your own house. 

Whatever way you choose to build a smaller home, the cost savings won’t stop when the building is done. Tiny houses are more energy-efficient than traditionally sized homes, which means heating and cooling them comes with a smaller utility bill each month. In addition, the maintenance costs of a home are directly related to the size of the home. Bottom line: smaller house, smaller bills. 

Cheapest Way To Put A House On Land

As you plan to build a house, don't overlook the importance of the land you will buy to put it on and the process that entails. We covered location and how the cheapest option is probably in a rural area, but what do you do once you’ve found the site? 

The cheapest option is to build where utilities like water and sewage are available to hook up through the local government. Septic fields and wells can have high price tags, so they aren't the cheapest route. 

If you do need to go the septic route, you will need to do a PERC test (a test of the percolation ability of the land). If it doesn't pass the PERC test, run for the hills. The only option left is an engineered septic, and they are pretty expensive. 

Consider the topography of the land as well. Rolling hills and streams may be picturesque, but the engineering, architectural, and building costs won't paint a pretty picture when it comes to your goal of finding the cheapest way to build a house on your own land.

Summary: Building A New Home Doesn't Have To Break The Bank

From being your own builder to making the right material choices, to carefully planning every square foot, there are plenty of ways to build your new dream home cheaply. 

Start by making a plan and budget while considering less expensive alternatives to the traditional home. Then, find a suitable plot of land at a low price. Next, do as much of the design and build as you can on your own. 

Lastly, always keep an eye to save costs at every turn from start to finish so you can enjoy many happy years in your new home and not end up with “builders remorse.”

About the Author

As a native Washingtonian, Carlos Reyes’ journey in the real estate industry began more than 15 years ago when he started an online real estate company. Since then, he’s helped more than 700 individuals and families as a real estate broker achieve their real estate goals across Virginia, Maryland and Washington, DC.

Carlos now helps real estate agents grow their business by teaching business fundamentals, execution, and leadership.

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