Why Are Tiny Houses So Expensive?

Since tiny houses take up only a small fraction of the area than a traditional home, you would expect their price to be dramatically low. But why are tiny houses so expensive you ask. There are many factors to think about and we will thoroughly discuss these below.

However, this is not the case anymore. When you compare the price per square feet of a tiny house and a regular one, a tiny house ends up being more costly.

Now, the question arises, when and why did these tiny houses rise to popularity? Why are minimalists so obsessed over these small structures? Why does it cost so much for a home that does not exceed 400 square feet of the area?

Keep reading to find out more about these trendy, Instagram-worthy tiny houses.

Table of Contents

How Did Tiny Houses Rise to Popularity?

Tiny houses started trending right after the downfall of the housing market in 2008. The first tiny house on wheels was introduced by Jay Shafer in 2012, who also went on to create a Small House Society with fellow tiny house enthusiasts.

Initially, these tiny homes offered a budget-friendly alternative to the increase in mortgage costs and housing rents. People could connect their mobile homes to a trailer and move wherever they want, maybe even an RV park.

Soon, the tiny house movement spread across the country, and more people started opting for a minimalist life on-the-go.

With multiple Instagram pages, TV shows, and books dedicated to living in tiny homes, minimalism was promoted and accepted irrespective of people’s socio-economic status.

Moreover, tiny houses were warmly welcomed by people looking to minimize their carbon footprint and become more energy-efficient. On the other hand, many were interested in letting go of most of their belongings to live a simpler life.

Consequently, the increase in demand all over America opened up the gate for many budding entrepreneurs to start their own business.

According to a website for tiny homeowners, Tiny House Community, there were more than 30 micro-communities all over the US in 2015 alone. Indeed, the tiny house trend is not ending anytime soon.

How Much Tiny Houses Cost?

Keeping in mind that a tiny house covers an area anywhere between 100 to 400 square feet only, they cost much less than a traditional home.

Statistics from 2012 show that a tiny house’s average cost was around $20,000 to $50,000, depending on the customization and design.

However, by 2018, there was a boom in the tiny house industry, and their prices sky-rocketed. As a result, an average tiny house would cost about $65,000. In fact, the high-end variety in tiny homes could even cost you more than $200,000 for living simply.

On the other hand, as per statistics from 2018, the median cost of traditional houses in the US can exceed more than $325,000.

Compared to purchasing a traditional home, however, a tiny house is still light on the pocket and saves you from a vast amount of debt. According to a report from Tiny Living, 55% of tiny homeowners had more money saved up than an average American citizen.

Why Are Tiny Houses So Expensive?

Although they are almost one-eighth of a fraction of a traditional home, tiny homes can cost way more in terms of price per square feet. This depends on multiple factors, including the location, built quality, customization, design, utilities, and even permits.

Let’s look into some of these factors that drive up a tiny house’s cost.

Location

The primary reason why a tiny house can cost way more than its living area depends on the location. While the pre-made house itself may be within your budget, finding a suitable place for it can be a hassle.

To be more specific, large and famous cities can have a much higher cost than living in a tiny house in a rural area. The overall value of your living quarters can waver quite a lot, depending on the location.

For instance, a report from CNBC in 2017 listed a tiny home cost at $460,000 in Maryland, the US. Although it does seem quite high, an average traditional home could cost you around $995,000 in the same area.

Thus, you will still be saving a considerable sum of money for living in a tiny house in that location.

Similarly, these tiny houses can rack up your bill if you live in cities like New York or the Bay Area.

Besides this, you have to look into building codes regarding your tiny home too. In a few places, some laws dictate the minimum square footage for your house to be counted as a residence.

Other places, meanwhile, require you to have a solid foundation for your tiny house. Moreover, it will be a huge hassle to get zoning permits even to register your home.

Apart from paying for the land, all these factors can drive up the final cost of a tiny minimalist house.

Oversaturated Market

With the increasing popularity of tiny houses on the internet, there is a massive demand for these minimalistic homes. Since people want to live a simple life in a tiny home, many builders have tapped into this market to provide the most luxurious ones.

Consequently, hundreds of builders try to do better than their competitors by adding expensive customization. Eventually, a surplus of tiny houses with unique furniture ends up saturating the market.

If all this was not enough, the real estate market meets this rising trend by overcharging their customers. All in all, you end up paying way more for a tiny home than its actual cost.

Customization

Customization is another critical factor that drives up the cost of your tiny home.

If you believe you can have all the benefits of a traditional home in a small house, think again. It is physically impossible to fit all the necessary equipment, storage space, and appliances in small square footage without custom furniture.

This is where the cost of building a tiny home rack up. With people wanting all the amenities of a traditional home, builders have to get creative. As such, they have to construct custom, space-saving furniture, and storage pieces for your tiny homes.

For example, you can have a storage unit that can double as a table, bed, or even a staircase. Similarly, the kitchen and the washroom, a major necessity of every house, needs to be completely customized according to the house’s design.

Additionally, many other amenities can increase the price of the house. If you want to convert your tiny house into a mobile home, you must ask your builder to fit the home with wheels. Moreover, you will have to invest in a truck that can move your house with ease.

Besides this, utilities like plumbing, electricity, and gas can further drive up the tiny house’s cost. While some people can purchase solar panels for power, those looking for a permanent residence need additional wiring for electricity.

Build Quality

If you want a pre-made tiny home, the builders will overcharge you for the quality of the house. Since it takes a lot of time and creativity to include all the necessary amenities, your home will be quite expensive.

On the other hand, a lower quality house will not have the same features as a customized home. On a positive note, it will cost you way less than the others.

If you want a fully-furnished tiny house at a lower price, you should consider building a tiny home yourself. However, it will require a great deal of patience and time to get the final result.

How Can You Cut Down the Cost of a Tiny House?

As mentioned above, one way to cut down the cost of a tiny house is to build it yourself. While it may require tremendous expertise and hard work, all the money you save will be worth it.

Moreover, you can customize the interior of your house from scratch to your liking and needs. In comparison, a pre-made home will include labor, custom pieces, and a considerable profit for the company.

If you are confident about taking on this massive DIY project, you can save money by selecting your fans, fixtures, and constructing your custom storage pieces. You can also ask for help from a close friend to get over any hurdle that you might face.

Besides this, there is also the option to purchase just the shell or the exterior of the tiny house. In this way, you will have to personalize the interior according to your budget.

Where can I find a tiny houses for sale?

If downsizing appeals to you, you will be surprised to know you can actually find tiny houses on Amazon and the retailer will actually ship right to you.

If your family is ready to take the leap into tiny home living or considering the idea of a guest house in your backyard, it’s so convenient to go online and check out Amazon tiny houses for sale and buy one? Need a hunting cabin or she/he shed for the back yard, and tiny houses could also be a great getaway home. We have found tiny homes with large windows and lots of light, so it would be great in a scenic area, like a lake or beach. They can ship for free within 3-5 weeks after you place the order on Amazon. Where can you find that kind of delivery time? A builder can’t touch that build time!

Here are 8 designs listed on Amazon:

Tiny houses have become so popular that some of the largest retailers are getting in the game. There are several nice floor plans for tiny houses for sale at the Home Depot too.

If you are a DYI person you can purchase Tiny house plans so you can get started immediately.

Conclusion

To summarize, tiny houses are costly due to the competitive real estate market in the US. Since the internet started obsessing over tiny houses, businesses started profiting over the rising trend of minimalism.

However, keep in mind that these tiny houses still cost way less than a traditional home. Instead of burying yourself in debt, tiny houses can be a budget-friendly alternative to many people.

I hope this article cleared all the doubts regarding the costs of motorhomes. It’s important to learn about the expense of living in a tiny home and how to cut down the final cost-effectively. Make a wise decision!

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