The Cheapest Way to Build a House: From Tiny Homes to Pre-Fabs

You’ve heard the stories about people who’ve bucked the system when it comes to homebuying, striking out and building their home themselves at a huge savings. Considering the high costs of existing homes and the lack of affordable housing in many areas, building new can seem very appealing. But you also have to wonder how sustainable the idea really is. Is it possible to build a home inexpensively, and what is the cheapest way to build a house?

Las Vegas real estate agent Daryl Hanna, a 20-year veteran of the industry, says that the savings can be big for an owner-builder.

“In Las Vegas, most builds are going to be on the higher end cost-wise, but you can still save a lot of money if you build it yourself,” he says. “The biggest savings is not having to hire a contractor to sub all the work out for you; you can sub it out yourself.”

Hanna says most of the builds he’s seen are by people who already have extensive experience in the construction industry — contractors who want to build their own place, or carpenters who know they can do a lot of the work themselves. “You can save 40% to 50% on building costs as an owner-builder,” he says, “but it’s also important that you know what you’re doing, as mistakes can end up costing you more than if you’d hired someone to do the build.”

With an average build cost in 2024 of about $315,000 (not including land), that can represent significant savings.

We took a look at some of the different options out there for the cheapest ways to build, consulting with top real estate agents and providing case studies of four different home builders who built four different types of homes — all of which show some interesting and innovative ways to build without breaking the bank.

So, is building an affordable dream home really doable? Let’s find out!

Is it cheaper to build or buy?

According to Arizona agent Gretchen Slaughter, who works with 69% more single-family homes than other agents in her region, the answer is subject to a lot of different factors.

“That’s kind of a tricky question,” she says. “It depends on your area and what’s included in the builder’s package. New construction might seem less expensive — but if, for example, it doesn’t include landscaping, and that’s something you have to do yourself after closing, that can be expensive. A preowned home already has all that.”

In addition to extra expenses like landscaping, the overall timeline for buying an existing house is usually quicker. Depending on inspections and contingencies, a standard home closing takes around 43 days — as opposed to a new build, which can take upward of six months or more, if you end up on a builder’s waiting list. If you need to get into a place right away, it might make more sense to buy a preowned home.

Buying an existing house could be less expensive than building new if you can find a deal on a fixer-upper and put in some sweat equity. Keep in mind, however, that renovating a pre-owned home can also mean the headache of ending up with a house that needs more work (and will cost more in repairs) than originally anticipated.

New builds offer buyers what can be some heady incentives, such as being able to select your floor plan and pick out features like countertops and lighting, which provides a feeling of control over the final product.