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Tiny homes are more in vogue than ever. While traditional home prices skyrocket, buyers are often able to purchase tiny homes in cash—freeing up their wallets to build savings, invest and travel. Tiny home advocates highlight the ecological benefits, too. As climate change becomes a looming threat, tiny houses use only 7% of the energy of a traditional home.
Tiny homes are classified as “400 square feet or less in floor area, excluding lofts,” according to the International Residential Code. While tiny houses can be built on a foundation, they are often equipped with a trailer hitch that allows the resident to travel. Tiny home life requires residents to pare down their belongings. And while many of us are attached to creature comforts, minimalistic living provides the ability to cut costs, travel and do our part to help the environment.
Tiny house statistics
While tiny homes are generally cheaper than traditional houses, costs associated with them can still stack up. Additionally, the minimalist lifestyle, while great for travel and the environment, may not be for everyone. It may be wise to consider the following statistics before deciding whether or not to purchase a tiny home.
- Tiny homes grew popular during the Great Recession in 2007, when families were looking for ways to save money. (Business Insider)
- To be considered a tiny home, a structure must have a ceiling height of no less than 6’4″. (iProperty Management)
- The smallest tiny homes are around 80 square feet. (iProperty Management)
- On average, a tiny home costs less than one-fifth what a traditional home would cost. (iProperty Management)
- The average sales price of a new single-family home is $383,900, whereas the average cost of a built-to-suit tiny house is $59,884. (iProperty Management)
- A tiny house uses only about 7% of the energy that a traditional house does. (iProperty Management)
- Moving to a tiny home can nearly cut a household’s ecological footprint in half. (iProperty Management)
- 85% of tiny homes have above-average energy efficiency. (iProperty Management)
- The states with the most tiny homes are California, Florida and Colorado. (iProperty Management)
- 89% of tiny house owners have less credit card debt than average. (Tiny House Society)
- 60% of tiny house owners have no credit card debt. (Tiny House Society)
- 55% of tiny house owners have more savings than the average homeowner. (Tiny House Society)
- 2 in 5 tiny home owners are over 50 years old. (Tiny House Society)
- Tiny homes are appreciating twice as fast as the overall market at 19 percent vs. 9 percent. (Realtor.com)
How much is a tiny house?
You may be wondering: how much are tiny houses? The average cost of a tiny home is $59,884, while the median sales price of a traditional home is $407,600, according to CBS News. These costs, however, can significantly vary. It’s possible to build a tiny home for as little as $2,000 or as much as $180,000.
This table can help you estimate the cost to build a house, for both tiny homes and traditional homes.
|Expense||Tiny home estimate||Traditional home estimate|
|Land||Varies depending on state and size of the lot. According to the National Association of Home Builders, the average cost of land is $90,000. If you’re building on wheels, you’ll need a large trailer that costs between $4,500 and $9,000. (HomeAdvisor)||Varies depending on state and size of the lot. According to the National Association of Home Builders (NAHB), the average cost of land is $90,000.|
|Building permits and taxes||Varies depending on location, but you can expect to spend about $1,350. (Bob Vila)||$18,300 (NAHB)|
|Foundation and framing||$5,000 to $8,000 (Bob Vila)||$87,000 (NAHB)|
|Home systems (electrical, HVAC, plumbing)||$30,000 to $60,000. If you need to hook up to pre-existing electrical and sewage lines, you may need to spend about $250 per month (Bob Vila)||Between $40,000 and $45,000 (NAHB)|
|Exterior costs (roof, siding, windows)||Combined with interior costs, expect exterior costs to run you between $14,050 and $60,000. (HomeAdvisor)||$51,500 (NAHB)|
|Interior costs (furniture, flooring, insulation)||Combined with exterior costs, expect interior costs to run you between $14,050 and $60,000. (HomeAdvisor)||$70,000 (NAHB)|
|Home insurance||$600 per year (Treehugger)||$1,383 per year for $250,000 in dwelling coverage (Bankrate)|
When answering the question “how much is a tiny house,” it’s important to consider the cost of insurance. Insuring your tiny home may be more costly than the average cost of homeowners insurance for traditional homes. Many tiny homes are built with a trailer hitch to facilitate travel. Moving a tiny home increases the risk of damage, and as a result, tiny home owners may pay higher home insurance premiums.
If you’re looking for homeowners insurance for your tiny home, note that you may have to purchase a mobile or manufactured home insurance policy for it. Talking with a licensed insurance agent from one of the best homeowners insurance companies on the market can help you understand what type of policy would work best for you.
Living off the grid
The hope of “living off the grid” is one reason that spurs people to consider tiny homes. Living off the grid refers to the practice of living away from the trappings of modern society, such as internet access, schooling and even the electric grid. An offshoot of living off the grid is called “homesteading,” which refers to the practice of gaining self-sufficiency through making your own clothes, food and generating your own power.
People choose to live off the grid for a wide range of reasons. Many tiny homeowners are concerned about the climate crisis and want to avoid over-consumption. Living in a smaller, more energy-efficient home with fewer belongings helps them reduce waste. In fact, a tiny home uses only about 7% of the energy that a traditional house does. Even if you’re not totally off the grid, tiny homes can help you live sustainably, especially if you install solar panels or use wind power.
Skyrocketing home prices have spurred others to consider tiny homes. The median monthly mortgage payment for a traditional home is $1,889, a sum many millennials can’t afford. Tiny homes, on the other hand, can cost as little as $8,000 total. Even if you can’t afford to pay cash for one, monthly mortgage and utility payments can be as low as $450. Seventy-eight percent of tiny home dwellers own their homes, compared to 65% of traditional homeowners.
Of course, you don’t necessarily need a tiny home to cut down on costs. Those who aren’t ready to embark on the tiny home lifestyle may want to consider purchasing small houses with just enough space for their belongings and needs. Small homes can cut utility and mortgage costs while still providing for homeowners’ needs.
The largest hub of homesteaders is in Livermore, Colorado, where residents plant their own food, raise chickens, build their own homes and make their own clothes. Saratoga Springs in New York State is an East Coast hotspot for homesteaders. If you’re looking for the best spots to live off the grid in your general region, you may want to check out HomeAdvisor’s “off the grid” hotspot map.
Tiny home capitals
If you’re not ready to become a homesteader but are interested in tiny living, Portland, Oregon; Austin, Texas; Los Angeles, California; New York, New York; and Seattle, Washington all maintain sizable tiny home communities that range from 10 to over 100 tiny homes per community. Currently, the largest tiny home development in the country is in the works in Salida, Colorado and will feature 200 tiny homes for rent.
While settling down in a tiny home community may be right for some people, others may use their tiny home as a means to travel. Some tiny homes are built on a foundation, but many are built as trailers and can be pulled from one location to the next. Want to spend the summer in Maine and the winter in San Diego? With a mobile tiny home, you can move from one location to the next with ease. In this case, renting a plot of land rather than owning it would be best suited to your needs.