Where Is the Cheapest Place to Build a House?


Compared to purchasing an existing home, building one might be more thrilling and fulfilling. Though it can also be rather expensive. A few of the many duties involved include choosing an appropriate location, designing the home, getting the required licenses, hiring builders, and supervising the building process. You might be wondering: Where is the cheapest place to build a house?

The cost of building a house is significantly influenced by its location.

Some geographical areas cost more to develop in than others because of factors including labor costs, the accessibility of land, and regional building codes.

Let’s find out where it is most affordable to construct a new home so you may select the ideal location for your new house and save money while doing it.

Where Is the Cheapest Place to Build a House?

Here are the top states with the cheapest new construction locations to consider.


In Ohio, constructing a home typically costs $160,212. The Cincinnati-Middletown is the least expensive area in the state. Land in this region is relatively affordable, and the labor costs are lower than average. Moreover, construction costs may be further reduced thanks to the area’s building standards which are less strict than those in other parts of Ohio.


The estimated expense to build a house in Alaska is $228,064. While the cost of labor tends to be more expensive due to the remote location, the Last Frontier State land is cheaper compared to other states with prices starting as low as $1,000.


Texas is one of the top states for cheap houses with an estimated cost of $176,045. The price is affordable thanks to the low construction and labor costs. Regional variations in land prices result in some areas giving affordable lots for as little as $1,000 per acre.


The cost to build a house here is estimated at around $155,215. The state has generally favorable building regulations that can make it easier and more cost-effective to obtain permits and build a house.

Land costs are also affordable in most parts of Mississippi, with an average price per acre of $2,400. The state has an abundance of resources such as timber, which can help keep material costs lower compared to states without these resources.


At $150,310, Michigan has the lowest average building cost in the country. In comparison to many other states, the Great Lakes State has a relatively inexpensive cost of land. This translates into the ability to buy a bigger piece of land for less money. This practice can bring down the entire cost of constructing a house significantly.

Also, thanks to the state’s robust manufacturing industry, you can often buy building supplies for less money than in other regions. Moreover, Michigan has a large number of timber mills, which might lower the price of wood products.


The estimated cost for home construction in Alabama is $175,061.

The entire cost of building a house is further reduced by the relatively cheap land for sale and low property taxes.

There is a competitive market for home builders in Alabama, which also help keep prices down. There are many home builders in the state, leading to increased competition and lower prices.


In Georgia, constructing a home typically costs $196,659. Acreage in the state ranges from $3,000 to $4,500.

The mild climate allows the building to take place year-round, without significant interruptions due to weather. This can help to speed up construction and reduce costs associated with weather delays.

New Mexico

In New Mexico, constructing a home typically costs $183,264. The cost of land in the state is low. On average, you would pay a thousand dollars per acre. Even lower prices can be found in farther-flung locations.

Lumber, adobe, and stone are just a few of the abundant natural resources found in New Mexico. This can provide opportunities for using locally-sourced and sustainable materials. Also, the state is known for its low taxes and incentives.


The estimated cost to build a house in Wyoming is $186,615. You can buy land at an affordable rate and labor costs may also be low too because there is a smaller pool of general contractors and subcontractors. Farmland costs $1,720 per acre and cropland goes at $850 per acre.

Wyoming’s regulatory environment is generally considered to be business-friendly. For example, the state has relatively low building permit fees compared to other states.

South Carolina

In South Carolina, constructing a home typically costs $203,904. 

Because there are so many qualified workers in the area, labor expenses are also cheaper than normal.


The estimated cost to build a house in this state is $190,294. Wisconsin’s regulatory environment is generally considered to be moderate, which can help keep building costs lower compared to states with more strict regulations.

The state has a strong construction industry, with many skilled laborers and contractors available. This can help keep labor costs lower compared to other states.


In Minnesota, constructing a home typically costs $181,873. Minnesota’s regulatory environment is generally considered to be moderate, which can help keep building costs lower compared to states with more strict regulations.


The estimated cost to build a house in Oregon is $218,013, while a parcel of land will cost you around $5,000 or double that amount per acre. Oregon has a strong construction industry, with many skilled laborers and contractors available. This can help keep labor costs lower compared to other states.


Building a house in Arkansas is expected to cost $162,662. Because of the lower living costs, the state has cheaper labor and material prices than many other states. Also, there’s a surplus of available land, which keeps land prices relatively low. The state also offers a selection of building sites, including both rural and urban areas, which can give people wishing to build a home a number of possibilities.

West Virginia

One of the most cost-effective methods to buy a home is to build one, despite West Virginia’s higher labor expenses.

The overall expense is estimated at $154,157.  For individuals wishing to build a home, West Virginia offers a variety of building sites, including both rural and urban areas.

Additionally, the state’s comparatively permissive building laws and restrictions might make it simpler and less expensive to get building permits and build a home.

This may assist in lowering the project’s overall cost.

South Dakota

South Dakota ranks high on the list of the cheapest places for your house-building project. The overall cost averages $157,110 and the hourly labor is estimated at $14.02. The state is also one of the favorite choices of homeowners thanks to its strong and diverse economy. The leading sectors are agriculture, manufacturing, and tourism.


Due to its low cost of living, inexpensive land prices, flexible building restrictions, thriving economy, and accessibility to natural resources, Alabama is an ideal destination for people who seek to build a home at a lesser cost. According to the latest estimations, building your dream home in Alabama will cost you on average $175,061.


In Kentucky, the average cost of a new construction home is $168,134.

In addition, the state’s history of industry and construction has produced a skilled workforce. This means that homeowners will be able to obtain high-quality work at a lesser rate.


Missouri’s average building cost is  $173,168, whereas the hourly labor cost is $20.51. A huge benefit of building in Missouri is the rich abundance of natural resources, such as timber and limestone. A home’s construction costs can be cut in half by using these materials.


Montana is one of the least expensive states in which to plant permanent roots, and its stunning landscapes and wide open spaces have made it famous.

Building a house from scratch in this state is $187,997. The low tax rate, especially on real estate, is a major benefit that reduces the outlay for both construction and upkeep.

Also, Montana has relatively relaxed building codes and regulations, which can make it easier and more affordable to obtain building permits and construct a home.

How to Choose the Ideal Place to Build a House?

When trying to figure out where is the cheapest place to build a house, start by choosing the right location from the cheapest US states to build a house. Here are several factors to consider.

Cost of Living

The total price of constructing a house could be affected by the cost of living.

The cheaper-cost-of-living states will have cheaper expenditures for materials, labor, and other associated costs.

Land Availability

It’s important to consider the availability of land in the state you’re considering. Buying a plot of land for a home is simpler and more affordable in states with a large supply of such land.

Building Codes and Regulations

It’s essential to research the building codes and regulations of the state you’re considering. Some states have more relaxed building codes, which can make the permitting process easier and less costly.


The climate of a particular state can impact the cost of building a home. For example, states with harsh winters may require additional insulation and heating systems, which can increase building costs.

Job Market

It’s important to consider the local job market when choosing a state to build a home. A healthy employment market can help the local economy by producing jobs and making it easier for homeowners to finance the costs of home construction.

Natural Resources

Natural resources can be utilized to make low-cost building materials and even as renewable energy sources. Additionally, several states have legislation that mandates the implementation of sustainable methods by builders in order to lessen the negative effects of construction on the environment.

Utilizing natural resources can help builders adhere to such regulations, while also helping to reduce the overall cost of building a house.

What Is the Cheapest Way to Build a House?

The location, size, materials, and degree of customization desired are just a few of the significant aspects that affect how cheaply a house may be built.

But, the following general advice will help you lower the cost of constructing a house:

  • Build a tiny house. Tiny homes are the cheapest property type. They require less labor and building supplies, which can drastically lower the total cost of construction.
  • Choose a simple design. A simple design with fewer frills and ornate features can reduce the cost of construction.
  • Employ cost-effective building materials. Instead of spending more money on options like stone or brick, choose cost-effective building materials like concrete blocks, vinyl siding, or asphalt shingles.
  • Consider a prefabricated home. These structures are prepared in advance and placed on-site, which can save construction costs.
  • DIY some tasks. You can save money by painting, landscaping, or installing fixtures on your own.

How to Budget for Home Building?

Although creating a budget for a home improvement project might be challenging, the following fundamental stages should get you started:

Create a Detailed Plan

It’s crucial to develop a thorough strategy that details all the project’s costs before beginning any development. This should include permits, materials, labor, and any other expenses.

Research Costs

Research the cost of building materials and labor in your area. You can get estimates from contractors and suppliers, as well as from online resources.

Set Aside Contingency Funds

In the event of unanticipated expenses, such as changes to the building plan or difficulties that can arise during construction, a contingency fund ought to be set up.

Prioritize Your Needs

Budget your money based on the characteristics of the home that are most essential to you.

This can assist you in limiting your expenditure on discretionary things.

Track Expenses

Keep track of all expenses throughout the construction process to ensure you stay within your budget.

Hire a Professional

Consider hiring a professional such as a builder or architect to help you plan and manage your budget. They can certainly help you avoid costly mistakes.

Final Thoughts: Should You Buy an Existing House or Build One from Scratch?

Building a custom house can be an expensive project. However, new owners can control construction prices and make sure their dream home becomes a reality by doing their homework on building expenses, making a thorough plan and budget, ranking their needs in order of importance, and choosing the ideal location. Hopefully in this article we helped you to find an answer to the question: Where is the cheapest place to build a house?

Discount Lots can help you in the search for the cheapest land available in your desired area. We have a selection of properties across the country, ranging from small residential lots to large acreages perfect for building a custom home. Plus, we offer convenient owner financing that can significantly reduce your overall expenses!

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