Couple in front of new construction starter home.

Beginner's Guide To Building A Starter Home

Lauren White4 minute read
October 06, 2021

You’ve had it with rising rent prices. You’re done throwing away your money, but you don’t have a lot to invest, and if you buy a home, you might not have enough savings for repairs and renovations.

Take a deep breath because the once-scary thought of building your own starter home is more tangible than ever. There is a blueprint for every lifestyle and budget, and yours is waiting for you to take the leap. Whether you want to go modular, small or even tiny, there’s an affordable option to help you transition, save and grow while beginning your homeownership journey.

What Is The Average Starter Home Square Footage?

Most starter houses are smaller than average since first-time home buyers are usually young couples or single professionals looking to invest in real estate without taking on a large monthly mortgage payment. In many cases, they are planning to move in 5 – 10 years and find their forever home when they are more financially stable.

If you decide to build your own, the size will depend on the type of floor plan you choose to build, but the average size of a starter home is 800 – 1,500 square feet. Of course, you can always choose to go smaller or larger depending on your family’s wants and needs.

Neighborhood trends at your fingertips.

Check your local market.

Popular Starter Home Designs

There are three types of starter houses that new homeowners prefer when building: tiny houses, small homes and modular houses. Each one comes with its own set of advantages and disadvantages, so you should take the time to thoroughly research each style before choosing a design for your new home.

Tiny Houses

To get you out of your parents’ place.

Tiny houses are typically around 100 to 300 square feet, with construction costs ranging between $30,000 and $60,000 as of 2020. However, some handy homeowners have managed to build tiny homes for as little as $8,000.

While some people can make this small space work for their family, even a single person should do some intense soul-searching before making this choice. This minimalist lifestyle is not for everyone, but it might just be perfect for you.

The low cost means you may be able to skip out on a mortgage altogether, and the small square footage means low or nonexistent utility bills depending on the features you prefer.

You can either build the house yourself or hire professionals in the industry. There are lots of companies that specialize in tiny home construction to answer to the quickly growing demand. Think about the essentials you couldn’t live without, how you can make use of your outside space and ways you can create multi-use areas and surfaces.

Small Homes

To start your lives together.

Small houses are usually 750 to 1,250 square feet, while average-sized houses are over 2,000 square feet. Considering that the average cost to build a home is about $123 per square foot, you’re looking at a $90,000 to $150,000 build. Of course, this isn’t too much less than buying a ready-made home, but there are benefits to building your own, which could make it worth it:

  • Saving up for a smaller down payment. Building a smaller home obviously requires less money than buying a traditional-sized single-family home, which means it’s an easier entry-level purchase for young buyers looking for a cheaper, more customizable option. Granted, you’ll need to take out a construction loan instead of a traditional mortgage.

  • Constructing to your specific needs. Maybe you don’t want a foyer, but you would love a mudroom off the back door. Maybe you want to combine the kitchen and dining room concepts. When you build for yourself, you can cut out useless space and optimize for your needs.

  • Allowing a worry-free period. Everything will be shiny and new in your starter home. You won’t have to worry about rusted plumbing or old electrical connections in a new construction house – at least not for a long while. After putting up a substantial investment on your mortgage, not having unexpected repair costs will be a relief.

  • Building with resale value in mind. When you design your small home, you can ensure it’s packed with attractive features that prospective buyers will want. A large family room, walkout basement, three bedrooms or more can help you sell your house faster when you’re ready to move into your next dream home.

Modular Houses

For ever-changing circumstances.

Not quite sure what life changes to expect in the next 5 years? Modular homes have come a long way. You can have a prefabricated house pieced together on your property, then add to it as your family and spatial needs grow.

According to Modular Homeowners, most prefab homes cost about $50 per square foot for a basic model, but some can be as high as $110 per square foot. Adding extra features such as attached garages, porches and even high-end finishes like crown molding or granite countertops will increase your total price.

Many of these designs are also built to be eco-conscious. You can select energy-saving features like solar panels, LED lighting and passive heating. They come in a great variety of styles so that you can have your rustic cabin retreat or a modern, industrial masterpiece. If you’re interested in building your own home, the Open Building Institute leads innovation on starter modular homes with their Sweet Home 3D program. With this platform, building your ideal home can be as easy as dragging and dropping on your computer screen.

The Bottom Line: Building Your First Home Can Be Less Expensive Than Buying

Purchasing a large piece of real estate might not be possible for every buyer, especially with the currently rising home prices found in most housing markets. Thankfully, there are plenty of opportunities to build an affordable home.

As you begin selecting the perfect design for you and your family, innovations in space-saving layouts and green technology can help you create a tiny, small or modular house that works best for you and your financial situation.

Use our square footage calculator before you begin to figure out how big your house plan should be so you can choose the right type of starter home.

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Lauren White

The Rocket Homes blog is here to bring you all you need to know about buying, selling and making the most of your home. Whether you’re thinking about becoming a homeowner, selling your current home or looking to keep your place in tip-top shape, our writers and freelancers bring their experience and expertise to meet you right where you are.