What Does it Cost to Build a House and Alternative Housing Options?


Buying a home and owning your little part of the world is the dream of many people. If any of you grew up in the 80s, you might have heard the line repeated by your parents, “Go to college, get a good job, and you can buy a nice house.” While many of us have this dream, the reality is that buying and selling a house in 2022 is expensive. You need to put what you earn on the sale right back into buying something unless you are downsizing or considering an alternative housing option. 


Alternative housing can mean many things, you could:

  • Rent a room from a friend or family member
  • Rent a bed in a hostel or live in a commune
  • Buy a cooperative housing share and live in a community
  • Buy a multifamily rental and rent out the other units
  • Rent from a multifamily owner
  • Rent an ADU
  • Trade your services for room and board with housesitting, being a caregiver, or family helper
  • Buy a fixer-upper and put your sweat equity into home renovation. 

These alternative housing ideas are similar to a traditional home, with a much lower cost than current home prices. 

The cost of building a traditional house

In 2022, the cost to build a 2,000 square foot, ranch-style home with three bedrooms and two bathrooms is $190,000,with the basic construction materials like asphalt shingles, vinyl siding, and hardwood floors. However, the average cost of most new construction homes ranges from $325,000–340,000 and up to $500,000+ depending on custom features. 

Traditional homes, also called stick-built homes because they are constructed with wood frames, have a few pros and cons that go along with the cost. 


Brand new – when you build a brand new house, there is no wear and tear on the new walls or flooring, all of the lighting and plumbing fixtures are in great working condition, and your HVAC unit is humming away no matter the season. You get to enjoy a new house. 

Energy-efficient– builders are now using the most energy-efficient mechanicals available for a house today. These new systems can lower your overall energy costs.

Low maintenance- new houses are built to current building codes, and with new appliances and house systems, you shouldn’t have any major repairs. Plus, any mechanicals, siding, roof, and even the grass if a nursery installs it has a limited warranty if a problem arises. 

Customization- your home can have the fixtures and features you choose within your budget. If you can afford marble countertops and love how they look, you can choose that type. The same goes for cabinets, flooring, lighting, and down to the type of faucets and furnaces you have installed. 


Cost– while we touched on this above, I want to throw in a little personal story here. Some good friends of ours built a new house this past year, 2021. The original quote was almost $400,000 for a 3400 square foot house. They had trouble with increased material costs and labor shortages throughout the build. When it was all said and done, the cost of their new house was over $550,000. Their journey turned me from even thinking of building a stick-built house. 

According to the National Home Builders Association (NHBA), 91% of builders are still having an issue with the reduced availability of building materials, and they expect that to continue in 2022. These issues will only cause materials to be scarce and prices to rise. 

What alternative housing ideas do people have that cost less than a traditional home? 


It’s best to consider whether or not you need to move right now. Wanting to move is a different drive, and you may be able to think outside the box by choosing an alternative housing option. But if you need to move, you have a couple of different routes you could go with pre-existing homes, cooperative housing, communes, hostels, buying or renting a multifamily property. 

The cost of moving into a pre-existing house

A pre-existing home may not be as expensive as a building, but unfortunately, with this housing market, supply is limited, and the costs are trending up. 

Current prices as of February 2022, according to ®realtor.com, is $392,450, an increase of 12.5% from last year this time. Homes are spending 17 more days on the market at 47 days, but unfortunately, inventory has also fallen 22.1% since 2021. 

My suggestion is if you are set on buying a pre-existing home, try to find a cheaper one that needs a little work and see if you can fix it up and possibly sell it in five years. This isn’t ideal but hopefully will get you into a pre-existing home at less than $392,450.

More traditional housing considered alternative options.

Cooperative Community (Co-Op)


You could buy into a Co-Op community similar to an apartment or condominium complex. In a Co-Op, you buy shares or membership, not your specific unit, so you don’t actually own anything but are technically “renting” long-term housing. There is no mortgage, but your fees go for your share of the Co-Op, any utilities, maintenance, and other expenses included in the agreement. Each Co-Op has its own terms so that the costs may vary, but to give some examples, Minneapolis the Nokomis Square, Cooperative is a 55+ community, and the total shares are $235,000. In Chicago, the Qumbya Housing Network, Well’s Park building has a 1-bedroom for $556. You can find shares for a down payment of $10,000, like the Ansley North Cooperative in Atlanta. 

Pros– small units are rented for reasonable rates, everyone works together to maintain the building, you have a community by your side. 

Cons– Some Co-Ops have strict rules you must follow, or you can be evicted; there are strict financing guidelines you must follow, you do not own the building, and if the owner defaults, everyone could lose their housing. 



Communes are when a group of families or individuals jointly own a plot of land and share all their income and other resources. The groups often have shared interests and beliefs in how the commune should be organized and work for each other. There is a degree of compromise as you work together for the desires and goals of the group. You can find a commune listed by the Foundation for Intentional Community. Penington Friends House, a commune in Manhattan, costs $1,094 to $1,737 a month. 

Pros– Many individuals feel a sense of freedom and family living in a commune. 

Cons– Relying on the skills of others, which may be rough in some areas.


Hostels offer temporary basic housing of 1-6 months to rent a bed. Some may be longer-term, but you’ll have to ask if they have more permanent housing. They may provide at least one meal a day, usually breakfast or dinner.

You get a furnished bedroom, which may be shared with someone of the same sex. If the hostel is for both men and women, they’re usually housed in separate areas. You also have shared bathrooms, kitchen, and laundry facilities. The fees range from $30–$60 per night. hostleworld.com has a directory of hostels in the U.S.

Pros– hostels can be very welcoming and social places. 

Cons-They have strict rules about behavior, and you can be asked to leave. 

Multifamily duplex or triplex

Over the years, the cost of renting has continued to increase along with buying a house. However, if you need a place to live, that is an alternative to owning a home, renting a duplex or triplex might work out for you. Depending on the number of bedrooms, you can rent a two-bedroom duplex or triplex for $700–$1800 a month plus the cost of utilities. If you can get financing, you could consider purchasing a duplex or triplex and renting out the other units to pay the mortgage, taxes, and insurance and possibly earn some money while living there for only the cost of your utilities. 

Pros– Renting you still have a lease agreement to follow but have a home as long as you pay rent. It might be cheaper than a mortgage. 

Cons– You don’t own a place to live. If you violate your lease, you could be evicted. Based on your lease terms, some rentals can get pricy, and rent increases with every lease renewal. 

Accessory Dwelling Units (ADUs)


ADUs can be a prefabricated structure or an additional room built off of a house or garage turned into an apartment. Some states have regulations on where you can build an ADU; check with your local housing authority. The prefabricated units have all the appliances and features you would expect from a traditional home; some have added bonuses like solar power. They can be installed in a matter of weeks. A 328 square foot ADU with a one-bedroom can cost $169,900 or $763/mo. Two bedrooms ADUs can be built for $229,900 or $1,033 a month and are 647 square feet. 

Pros:-They only take a couple of weeks to install on a piece of land. If you move, you can continue to rent the ADU for market rent. 

Cons– If you have one installed on your property, you need a foundation with water, electrical, and sewer hookups installed. 

Alternative housing ideas for those willing to trade skills for housing

House sitter

Homeowners hire house sitters for the peace of mind that their pets are being cared for, kept on a regular schedule, and in their environment. You could get a job as a professional house sitter who moves from house to house to take care of pets or just the house while the owners are away. And if you’re just living in the house, the owner knows it’s not vacant, and they are less likely to be robbed. Essentially, other than traveling between housesitting jobs, rent is free. 

Pros– you get to take care of different types of pets, you have a comfortable home to live in a while on the job. You can save on other housing while earning money to travel. You can explore the area with the pets. You can get short and longer-term house sitting jobs. 

Cons– you might be moving quite often if you can’t find a more extended-term house sitting placements. If you stay for quite a while, things could go wrong with the pet, like getting sick, or with the house, like a plumbing leak. 


Some people need others to help with daily tasks. As a caregiver, you will provide care for another person full-time, and you get room and board as part of the payment. To qualify, you may need to be licensed as a nurse, certified nursing assistant, or another caregiver role. Outside of the education, the cost of this position is essentially free other than expenses for your items and any activities. 

Pros– You get to live rent-free in trade for your services. You have a roommate to keep you company. 

Cons– It is a paid position, and you must perform your job adequately to keep the living arrangement. 


The concept of a fixer-upper has become popular over the past ten years. When the housing market crashed in 2008-2009, many handypeople purchased foreclosed homes by banks and fixed them up to live in or sell. You may be able to find a house that needs some work in your local neighborhood and do the same. These homes typically cost less but may need a substantial investment to make them livable again. Homes could cost anywhere from $60,000–$100,000+ depending on your location and housing market. 

Pros– If you are a handy person, you could save a lot of money to buy a rundown home and fix it up like new again. 

Cons– It may cost a lot of money to do that, and you may need to live somewhere else while you do the work. 

Housing costs can vary from location to location. If you are open to travel, living with others, trading your skills for housing, or building something less expensive than traditional housing, there are alternative housing options. Do your research to find out what fits your lifestyle the best. Alternative housing ideas vary as much as the type of house.

Housing costs can vary from location to location. If you are open to travel, living with others, trading your skills for housing, or building something less expensive than traditional housing, there are alternative housing options. Do your research to find out what fits your lifestyle the best. 


Eva is a freelance copywriter specializing in all things real estate, B2B, PropTech, ReTech, CRETech. Owning rental property herself, Eva's love of real estate has turned into a passion for alternative housing options and educating people about the different types of housing available.

What alternative housing options do people have that cost less than a traditional home?