7 Affordable and Realistic Alternative Housing Solutions in 2022

With house prices increasing, it’s becoming harder to afford a home in the U.S. For those who are looking for a cheaper option, or simply want a lifestyle change, these are the most realistic housing alternatives.

Irena Martincevic

September 30, 2022

1. Tiny Homes

For many people, a tiny home can be a good answer to the housing crisis. A tiny home is a dwelling that is 400 sq.ft. or smaller. Some can get very tiny down to 100 sq.ft. or smaller, while others can be more spacious, and have built-on features like rooftop decks to help expand the living area. A tiny home can have a permanent foundation or it can put on a trailer with wheels, so you can move it from one place to another.

The average tiny house can cost between $40,000 to $80,000, and can be built using different methods including kits, modular builds, and custom builds. This does not include the cost of land, but as these homes can qualify as ADUs or be on trailers that you can move, you may not need land to build on.

Tiny homes are not created equally or treated equally state by state. Some states have strict laws about where these homes can go and how large or small they can be. If you don’t build on a permanent foundation, keep in mind that you will need to find areas where you can hook up to sewer, water, and electricity or you’ll need to have alternatives to these basic utilities, all of which can increase the cost of living. These homes will also force you to stay organized, as there isn’t a lot of storage space inside. For this reason, some people in tiny homes will also rent storage lockers, which does have an added expense.

Tiny homes are a good option for sustainable living as well. They do use fewer materials in building, and consume less energy, which can make them more affordable than a traditional home if you build on a foundation.

For those that love to travel, those that want a place of their own, but don’t want to maintain a large home, and for those that want to be able to pick up and go quickly, a tiny house can be a good solution.

2. Modular Homes

A modular home is built in a factory before being transported to the final job site and finished there. Modular homes have a foundation, and can come in many different sizes and styles. They are faster to build and often much less expensive than traditional building as well.

They come in two basic types - a prefab home is built using existing plans and basic materials. Prefab modular homes cost as low as $50 a square foot, and are a much more affordable way to build in general. The other method is a custom build. It’s still less expensive than a custom home built using traditional methods, but is more costly at up to $230 a square foot. Traditional homes have building costs that average $100 a square foot for basic homes and up to $400 a square foot for custom, which makes modular a much more affordable alternative for many people. For the average home, this has a total cost range of $150,000 to $300,000.

Modular homes are faster to build than traditionally built homes, and usually boast more material because they will need to be moved. This means that they are often better built and more durable. However, once the build is under way, you cannot make any changes. And depending on where you live, you may have a difficult time finding someone to build the home. This method of building is becoming more popular, but there are some areas of the country where you may still have trouble finding a builder.

3. Mobile Homes

Another lower cost alternative is a mobile home. Both modular and mobile homes are types of manufactured homes, or factory-built homes. However, modular homes are referred to as modular, while mobile homes may be referred to as manufactured homes, which can cause some confusion, because while they sound very similar, they are two very different types of builds. A modular home is built on a foundation, and is for all intents and purposes a traditional single-family home when complete. A mobile home is not built on a foundation, but placed on a chassis. This means that the home can be moved. A skirt is usually placed around the base of the mobile home when it’s in a permanent location. You can place a manufactured home on a lot or in a mobile home park. They’re generally smaller than traditional homes, so they’re cheaper to build and maintain. However, they don’t have as much value as a traditional home, so resale can be difficult.

Mobile homes cost around $60,000 to $120,000 on average. If you opt for a mobile home park, you may have added monthly fees. Otherwise, you will need a plot of land to build or park your home on.

4. RV Park Model Homes

If you like the idea of travel, you may want to consider buying an RV. You can move them from campsite to campsite, or place them in an RV park. RVs can allow you to move around the country if you choose; you simply take your home with you when you go. Depending on the state, you can park them at a friend or family member’s home, or at any RV hookup. RVs are fully furnished inside, and many have a lot of amenities that can make them a more luxurious living situation than many traditional homes.

RVs do have a lot of added costs for monthly use and utilities. Unless you have a friend or family member generous enough to let you use theirs at no cost, you will need a septic hook up, water hook up, and electrical hook up. You’ll also need to rent the space you park your RV in, which has added costs depending on the area. The cost of a true RV motorhome starts at around $100,000, although you can find cheaper models that are pulled behind cars for as low as $20,000.

5. Accessory Dwelling Units (ADUs)

If you have friends or family who are willing to let you build on their land, you may want to consider an Accessory Dwelling Unit or ADU. An ADU is a small home like a backyard cottage, In-law apartment, or even a tiny home that is built behind the main home on the property. An ADU is considered to be part of the main property of the home. This means that you don’t need to purchase separate land or rent a plot. But, it does mean that technically the owner of the house will own the ADU. For some people, it makes sense to purchase a property together, with one person paying lower costs for the ADU and property taxes and maintenance than the owner of the primary home.

An ADU has starting costs of around $100,000. They do have restrictions by state on size, foundation, and what can be considered an ADU. Most do require a foundation to be considered legal. Like all homes, they will have basic maintenance costs and utility costs to consider. Because they are part of the main property, the main property will be billed for the utilities the ADU uses. This can make it complicated between the ADU dweller and the main home dweller unless an understanding is come to early on.

6. Shipping Container Home

If you’re looking for lower costs and a more sustainable home, a shipping container home may be a good fit. Shipping container homes use recycled containers as the shell of the building. They still require a foundation and are finished inside to look like a typical home. However, their exterior is made up of metal containers, which can give your home a very modern look. These homes can be small - made of just one or two containers - or they can be very large. Removing walls allows them to be connected or to make up large glass windows.

They can range in cost from $10,000 for a small home to $175,000 for something large and luxurious. They do require you to have a plot of land to build on, as these are permanent homes. Keep in mind that metal is a poor insulator, so you will want to fully insulate the interiors to avoid having higher than average energy bills.

7. Pole Barns and Barndominiums

Another lower cost alternative to a traditional home is a pole barn home or barndominium. A pole barn is a structure built without a traditional foundation. This makes the building much faster and less expensive to build. They can be finished inside like any traditional home, and can come in several sizes.

They have costs to build around $100 to $250 a square foot or $130,000 to $500,000 on average, which makes them the costliest of the alternatives but still more affordable than some homes. Barndominiums often have metal frames, which makes them very durable. They can be finished with several different materials as well, and given different exterior and interior looks. They do require a plot of land to build on, even though they do not have a traditional foundation. Like shipping container homes, they should be fully insulated inside to make up for the metal walls. They do usually have lower maintenance costs than traditional homes, however, as well as a lower cost to build.