Tiny House Cost vs. Traditional House Cost

There are lots of benefits from buying and living in a tiny house. The most obvious is the cost of the house itself.

I have written this blog post for you to SEE the difference in price between traditional homes and tiny houses. This only covers the issue of the price of the house itself. It doesn’t get into other factors such as purchasing land for the tiny house to sit on. I have purposefully excluded the issue of land since many tiny house owners select to park their homes in a friend’s back yard, lease the land, travel, or some similar arrangement. This is just a basic graph to prove a basic point.

According to CBS News, the average cost of a house in the United States is $156,100. The below graph shows the average price of a house, the interest paid and the total of both the house cost and the interest paid (purple). The graphs also shows the same for a tiny house (green). Although I don’t have statistics on the average price of a tiny house, based on my observation I would say the median price is somewhere around $25,000. Some cost less and some that come with all of the bells and whistles cost more.

The graph also shows the interest paid on a 30 year note for a traditional house, and a 15 year note for a tiny house at 4.5% interest.

How much does a tiny house cost

A typical American family’s rent or mortgage payment represents roughly 30% of their total income. This is before they put a piece of bread on the table or pay their utilities. If a potential home buyer bought a tiny house and gave up the extra square footage of a traditional home, they could quickly pay off their home and could focus their financial efforts elsewhere, such as retirement, vacations, changing careers, more time with their family, and so on.

I look forward to hearing your comments!

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Category : Blog

8 Comments → “Tiny House Cost vs. Traditional House Cost”


  1. Joey Jones

    Apr 19, 2011

    Nice article. Simple and to the point. Tiny houses may not be for everyone, but they are definitely a feasible option for anyone. Especially those who are already in over their head in debt. A tiny house would be a good way to downsize quickly.


  2. Our Tiny House

    Apr 22, 2011

    Doesn’t even include reduced upkeep costs (though I’m sure that number varies)…


  3. Joe

    May 01, 2011

    Great article… But, the numbers are not really an accurate comparision…

    Reason being, you’ve only financially accounted for the structure itself as it pertains to the tiny house, whereas you’ve accounted for the cost of both the land and the structure as it pertains to the conventional house.

    Obviously a smaller house is going to cost less (less material, less cost), but I wonder what the actual cost difference is when just the structures are compared.

    Keep up the great site. :-)


    • Tina

      Nov 07, 2011

      Also, another apples and oranges problem with your comparison is the 30-year versus the 15-year mortgages ~ I’d be interested to have a more accurate comparison. I’m sure it would be impressive enough! Thank you for these articles!


  4. Greg Cantori

    Jul 09, 2011

    Nicely done. Land costs are the big variable in making a more accurate comparision. Of course using a frinds or relatives lot for nearly free works. But if the Tiny home owner must buy or rent land they may still have a great advantage. For example, the land could be considered ‘unbuildable’ or otherwise too small allowing a tiny home owner to buy at a fraction of the going rates. The ability to live near ones work (and walk, bike or use public transit) would also add another huge savings in that Transportation is the second to third biggest expense in most household budgets. .


  5. Jen

    Aug 24, 2011

    Gasp! What happens to the banks if we stop paying them hundreds of thousands of dollars in interest!

  6. [...] they can be expensive for their size, tiny houses are exceptionally well built and much cheaper ($10 – $20,000) than their larger counterparts. Low build/purchase costs are followed up by [...]

  7. [...] reasons, but they also appeal to those seeking more time and financial freedom.  According to tinyhouselisting.com, “a typical American family’s rent or mortgage payment represents roughly 30% of their total [...]


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