Hobbit home exterior

Explore The Modern (And Sustainable) Magic Of Hobbit Houses

Miranda Crace4-minutes
June 08, 2021

“In a hole in the ground there lived a hobbit. Not a nasty, dirty, wet hole … it was a hobbit-hole, and that means comfort.”

—J. R. R. Tolkien, “The Hobbit”

If you’re a fan of the “Lord of the Rings” universe, you may have dreamed of visiting New Zealand and staying in Bilbo’s and Frodo’s hobbit-hole in the Shire. You can find hobbit-holes for rent or overnight stay in New Zealand – and some here in the U.S. Even better, you can easily build your own hobbit-hole and more thoroughly embrace the hobbit lifestyle.

But even if you’re not a “LOTR” devotee, there are great reasons to consider building a hobbit house of your own. Have you wanted to slim down your lifestyle and reduce your carbon footprint while still enjoying great design and a stylish interior? With an earth-sheltered home (that’s its official, non-“LOTR” name), you can have that and more.

What Is A Hobbit Home?

Basically, it's a home created in the earth, or covered by earth, which is used to insulate the home. A wall of windows bathes the home in natural light on its exposed side. A thoughtfully designed hobbit house can be extremely energy-efficient, and there are prefabricated shells available that make it possible to build your hobbit house within days.

Aside From ‘LOTR’ Fans, Who’s Pro-Hobbit House?

The U.S. Department of Energy (DOE), for one. Its website touts the energy-efficiency of well-built earth and bermed earth homes. Then there’s the Gates family. Their 40,000-square-foot Washington State mansion, dubbed Xanadu 2.0, is partially earth-sheltered, and demonstrates that your hobbit-hole does not have to be tiny. 

What Are The Advantages Of Earth-Sheltered Homes?

Earth-sheltered homes have been popular choices for humanity almost as long as there has been something called humanity. They exist all over the world because they’re a cost-effective housing alternative.


Soil is used the world over to insulate homes against heat and cold. In the Australian Outback town of Coober Pedy, where temperatures can reach over 120°F, over half of the town’s population lives underground. Because of the insulating qualities of soil, these homes maintain interior temperatures in the mid-70s even on the hottest days.


Hobbits range in height from 2 feet to 4feet, so their holes don’t need to be too big. That said, much taller folk are also embracing the tiny home movement.

In a recent survey of over 2,000 Americans by IPX1031, over half reported that they would consider moving into a tiny house. Why? Those who would move into a tiny home cited affordability (65%), efficiency (57%), eco-friendliness (48%), minimal lifestyle (44%) and downsizing (36%) as their top reasons.

If you’re ready to go full-KonMari on your material possessions and seek a more earth-friendly lifestyle, a tiny (or not too tiny) earth-sheltered home may be right for you.

Sustainable Resources

One of the ongoing criticisms of the building trades in recent decades has been the huge number of resources it takes to build a structure. Smaller homes simply require fewer resources to build. Earth-sheltered homes are often built around a concrete structure, or using prefabricated shells instead of wood.

What Are The Disadvantages Of Earth-Sheltered Homes?

It largely depends on where you plan to live. Let’s review some of the more common cons of building a hobbit home.


Building an earth-sheltered home can be more expensive than building a conventional home, although costs seem to be coming down. But you should expect to pay up to 20% more for your hobbit house – although those higher costs will be offset by substantially lower (or even free!) energy, as most modern earth-sheltered homes utilize solar energy for their significantly reduced energy needs.

Keep in mind, however, that if you are trading in your large McMansion for a small earth shelter, you’ll pay a lot less than you would if you were buying a similarly sized conventional home.

Site Considerations

There are many different factors to consider when choosing a building site.


Climate, soil, the slope of your intended site and its groundwater level will all play a role in determining the feasibility of building your hobbit home. Earth shelters are built on a foundation, which is susceptible to soil and grading issues. None of these factors individually present insurmountable problems, but any of them can increase construction costs.

According to the DOE, a south-facing slope with moderate to long winters is ideal for building an earth shelter. 


Before you get too far into your planning, check your local zoning ordinances to see if there are any restrictions preventing you from moving forward. Specifically, pay attention to lot size, minimum square footage and prescriptive requirements that specify the ways in which a home’s systems and design must perform and that don’t allow for variation for this type of dwelling.

Water In All Its Many Forms

“Water, water everywhere!” might be the battle cry of the DIYer’s earth shelter experience, but today’s professionally built earth shelters have overcome many of the challenges that building under grade can present. Thoughtful design and improved construction methods have gone a long way toward easing the problems that water can create.

Humidity problems in particular have long bedeviled earth homes, but with proper venting, it can be significantly reduced.

Can I Finance My Hobbit House?

Financing an earth shelter can be tricky, because the resale market for these types of homes isn’t yet well-established. In general, the sale of tiny homes is outside of the traditional mortgage industry because those homes are most frequently mobile, which in this case means not permanently affixed to the land. As such, tiny homes aren’t considered real property, and therefore can’t be financed with a mortgage.

Of course, earth shelter homes are permanently affixed to the land, so the comparison isn’t the same. It remains to be seen whether this type of alternative housing will generate enough of a market to fuel predictable demand. Lenders rely heavily on comparable real estate values to determine whether the home justifies the sales price the buyer is looking to finance so it can better assess the risk the loan presents.

You can consider financing your hobbit house with a secured personal loan. You’ll pay a higher interest rate, but securing your personal loan with property will make it cheaper than an unsecured personal loan.

The Bottom Line: Small Homes In The Earth For Those Of Us Who Love The Planet

If you’re downsizing or haven’t yet upsized, a hobbit house might be just the thing for you – even if you’d rather call it an “earth-sheltered home.” Ready to search for a home as unique as you are, anywhere in the country? Browse our listings!

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Miranda Crace

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.