Building a House for Under 200k - What Can You Get?

Many people these days don't want to settle for an older house that doesn't meet their exact needs, and so are opting instead to build their dream home. However, for many people budgets are tight, so $200,000 is quite a common limit for some families. You might wonder if it's even possible nowadays to build a house on this small a budget but if you are careful in your planning and don't require a giant mansion, it's entirely achievable.

Fortress Home, expert home builders in Chicago, give their best advice for building on a budget. Speak to them today about how to maximize your construction budget and get exactly the house you want: [email protected] or 773-770-8607.

How much does a house cost in 2021?

When you're looking at house building budgets it's good to understand what the current housing market is and what current house prices are. It's important to note that the prices below generally include materials and labor, but don't include land or professional fees, like those of architects and general contractors or project managers.

  • The average cost of building a house is between $100 - $200 per square foot, according to HomeAdvisor, although you can easily pay up to $500 per square foot for a custom build or a luxury home.
  • In 2021 the average total price to build a house was $283,415 with most homes ending up costing between $117,718 - $449,113.
  • In May 2021 the median price, for buying a home, was $287,148, up over 13% from the previous year.

There are many factors that will affect house prices with one of the biggest, being where you are in the country. The location where you are buying or building a house will have a huge impact on the cost to build or buy.

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Building a home for under 200k - what can I expect?

So when it comes time to build a home for 200k, what sort of size, floor plan and layout can you expect? At this budget are you stuck with a tiny cramped box or can you get enough square feet for your family to comfortably live? Fortress Home is a home construction company with hundreds of successfully completed residential projects.

Floor plans

Here's the good news, with $200,000 you can afford a comfortable family home, as long as you are happy to keep things simple. With a budget this size, you can afford a new home between 1,000 - 2,000 square feet. In a new house of this square footage you might expect to find some or all of these elements:

  • 1 - 4 bedrooms
  • 1 - 2.5 bathrooms
  • Garage
  • Basement
  • Laundry room
  • Either open plan living or separate living/dining/kitchen

House styles

When you choose to build a house under 20k don't worry that you'll be stuck with a featureless gray box. With modern materials and building techniques, you can afford a new property that your family will fall in love with, without paying too much.

From modern to ranch and farmhouse, there are many different options to choose from during the design phase to make sure your new house is exactly what you want.

Tips for building a home under 200k

When it comes to building a house for under 200k it's important to be budget-minded so we've put together some tips to help you make the most of your money, and achieve your dream home goals.


When buying the lot for your dream home consider buying a developed lot with all the utilities and services like water, power, and sewers ready installed. While the lot costs will be higher you'll save yourself a lot of time and money on meeting local regulations, getting surveys, installing utilities, and preparing the land.

If you buy a developed lot your newly built home will likely also be part of a new neighborhood or community.

Floor plans

Choose your floor plan carefully and work out exactly what you need from your new house. Think about what you love about your existing home and what you'd change. To keep costs down, try and keep the square footage down, but balance that with planning for the future. You don't want to grow out of your new house too quickly.

You'll probably also save money choosing an existing floor plan rather than designing a completely custom home, as many builders have a range of standard layouts with floor plan pricing, making it easy to understand the final price tag of building your own home.

Consider a prefab or modular home

Gone are the days of modular homes being dull and boring - now they offer a range of styles and options to suit most tastes. This style of house is great at keeping the building costs down as the bulk of your house will be manufactured in a factory and then delivered to the building site ready to fit onto your foundation with plumbing and wiring already fitted in the walls and floors.

This type of house will save you money on labor costs, although you will need to make sure you work with home builders who are experienced at setting up this type of house.

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Materials choice

When it comes to building a new home on a budget you should choose your materials carefully. Your builder should be able to advise on what the most affordable options are in your area but some ideas to consider are:

  • Pole barn homes are an affordable construction technique, where you save money on the foundation.
  • Container homes are increasingly becoming fashionable. These houses are built from upcycled shipping containers which offer solid structures that can be put together to create interesting layouts.
  • Reclaimed materials can offer some good cost savings - for example using reclaimed wood for flooring, or finding some reclaimed plumbing fixtures and fittings.
  • Concrete is a solid and affordable construction option and can be made to look far more appealing than concrete houses of old, thanks to modern building techniques.
  • Bamboo is cheap, strong, and light and can be used instead of more costly hardwoods.

Consider extras carefully

While basements and garages are nice to have, you need to decide if they are essential for you, as they can add a lot to the cost of building a new house.

Upgrade later

Think about what you can upgrade at a later date and where you can cut costs, as budgets can quickly balloon when you start looking at high-end fixtures and fittings.

Simple faucets and kitchen units from places like Ikea or Home Depot can look stylish while being eminently affordable and can be easily replaced at a later date when budgets allow.

Do you really need new appliances and furniture or can you bring your current ones from your existing home?

Contingency budget

Always make sure you have a contingency budget for unexpected situations - whether this is part of the $200,000 budget or on top of it, it's important to have, even when you're building a house for under 200k.

Frequently Asked Questions

Is it possible to build a house for 200k?

While you need to be careful with your budget, the answer to the question "can you build a house for 200k?" is a resounding yes. Depending on where you are in the country, and the cost of land where you are, you can expect to be able to build a 1,000 - 2,000 square foot house, with 1-4 bedrooms and 1-2 bathrooms for this size of budget.

At this price range, it is more of a challenge to build a completely custom house, but it is still possible if you find the right builder and choose the right design and materials.

How big of a house can you build for $200 K?

The size of house you can build when building a house for 200k will very much depend on the cost of land where you are or if you already own a plot of land. However, in many more affordable states, you can build a 1,000 - 2,000 square feet house at this budget point.

If you choose to build a modular or prefab home you will probably have more options at this price point.

How big of a house can I build for 250k?

With a budget of $250,000 you can expect to get a house of up to 2,500 square feet, which can comfortably contain up to 4 bedrooms. Although if you are looking for custom-built homes under 250к you might need to consider slightly smaller footprints, as custom houses are generally more expensive than standard house plans.

What is the cheapest type of house to build?

There are several different options to choose from when building a house on a budget. Some of the cheaper types of houses to build are:

  • Tiny homes, under 1,000 square feet
  • Shipping container homes
  • Prefab or modular houses
  • Concrete houses
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Fortress Home is a company that strives to build homes exclusively of high quality and comfort standards at an affordable price. Thanks to this approach, within the framework of each project, we not only achieve construction goals but also exceed our clients' initial expectations, including the quality of service.

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