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 home itself.

I have written this article for you to see the difference in price between traditional homes and tiny homes. This only covers the issue of the price of the home itself. It doesn’t get into other factors such as purchasing land for the tiny home to sit on. I have purposefully excluded the issue of land since many tiny home owners select to park their homes in a friend’s back yard, lease the land, travel, or some similar arrangement. For small homes that are fixed and must have land purchased with them, you would need to take the price of land into consideration. Even so, the savings from purchasing a small home are still very substantial. This is just basic information to prove a basic point.

According to CBS News, the average cost of a home in the United States is $156,100. The below numbers show the average price of a home, the interest paid and the total of both the home cost and the interest paid. The numbers also shows the same for a tiny dwelling. 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 numbers 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 can be saved by purchasing a tiny home?

Cost of the house

Traditional house = $156,100

Tiny house = $25,00

Interest Paid

Traditional house (30 year loan) = $128,636.87

Tiny house (15 year loan) = $9,424.70

Total Paid (cost + interest)

Traditional house = $284.736.87

Tiny House = $34,424.70

This means that the cost of a tiny home only represents approximately 12% of the cost of an average traditional home.

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 home 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