Tiny Homes Can Be Less Advantageous Based on Location and Size

Blue piggy bank with tiny home on wooden table over blurred garden bokeh background. stock photo
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The pandemic sent many Americans looking for more living space. While large home sales were booming, so were tiny homes. Similar to the rest of the housing market, the cost of these standalone or backyard shelters is going up.

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The tiny house movement has exploded over the last decade, mostly with those in their 20s and 30s opting for the minimalist lifestyle. According to a survey from home services platform Porch.com, these dwellings are usually under 600 square feet, but the average size of a tiny house for sale in the U.S. is 225 square feet, or about eight times smaller than a typical home.

On a national level, tiny homes are $52,000, 87% cheaper than a regular-sized home. However, buyers are paying more per square foot.

“Another thing worth noting about the affordability of tiny homes is that they actually work out pricier if you look at how much you’re paying per square foot,” according to Porch Research. Per square foot, tiny homes are 62% more expensive than full-size homes, CNBC added.

Related: 17 Dumb Home-Buying Mistakes That Hurt Your Wallet

Volodymyr Kupriyanov, a researcher at Porch.com, told CNBC that this bigger price tag is due to the added complexity of utility hookups, as well as building and maintaining a smaller building. Additionally, zoning laws vary by location, as well as insurance costs; further pushing up the price. If you’re looking to build a tiny home, the cost of building supplies has gone up. This is due to supply chain issues and the growing cost of labor, land and materials, CNBC reported.

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“If your house is located off-grid — meaning there’s no access to utility sources — you may need to collect rainwater or dig a well, use solar panels and install a septic system. All of these will add to the cost of a tiny home build,” Kupriyanov explained.

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The best deal on a tiny home can be found in North Dakota for $28,000, according to Porch Research, but if you’re going by square footage, CNBC noted that Arkansas is the cheapest. On the opposite end of the spectrum, Hawaii is the most expensive state to buy a tiny home, with an average price of $149,000 (or $490 per square foot).

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Last updated: August 19, 2021

About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.

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