Where Are the Best Areas for Tiny Homes?

If you're looking to downsize your living space and expenses, a tiny home might be a great fit for you. Many of them come with energy-efficient features, beautiful, modern designs and are in areas you want to be.

However, there's another side to that coin: They're much smaller. So even if you plan to downsize, it's important you have enough space devoted to the things you need like storage.

How big is a tiny house?

While there isn’t a standard size, tiny houses are usually between 100 and 400 square feet and rarely exceed 500 square feet. By comparison, the median size of a new, single-family home was 2,480 square feet, according to Bankrate.

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How much do tiny houses cost?

The average price of a tiny home is about $30,000 to $60,000 versus the average price of a normal-sized house, which is $419,200. However, location, size, customization, furnishings, zoning laws and home insurance costs are all factors that can drive the overall price of a tiny house higher. Whether you buy a pre-existing tiny house or build one from scratch plays a role in the pricing too.

Why live in a tiny house?

Tiny houses are cozy, energy-efficient, vertically and horizontally-challenged and wildly popular — and the interest in them is only gaining momentum. Still, the price and the experience of living in one can vary widely depending on many factors, including location.

So which states are the best for tiny house living? Here are the ten best (and ten worst) based on the LawnStarter survey.

10 best places for tiny house living

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Top states for tiny homes
Rank	State	Overall Score	Legality Rank	Urban LIfestyle Rank	Remote Lifestyle Rank
1	Vermont	89.07	1	2	15
2	Kentucky	85.34	1	14	3
3	Arkansas	84.60	1	5	16
4	Maine	83.80	1	4	20
5	Minnesota	78.32	1	21	4
6	Montana	76.39	1	18	10
7	Alabama	74.45	1	6	28
8	Georgia	73.40	1	12	23
9	Texas	72.91	1	39	2
10	Kansas	70.35	1	37	7

10 worst places for tiny house living

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Rank	State	Overall Score	Legality Rank	Urban Lifestyle Rank	Remote Lifestyle Rank
41	Maryland	42.94	1	38	47
42	Nevada	36.74	1	50	45
43	West Virginia	43.31	4	9	21
44	Iowa	43.16	4	28	1
45	Wisconsin	40.60	4	17	14
46	North Dakota	37.16	4	32	8
47	Louisiana	35.49	4	15	25
48	Alaska	29.31	4	7	43
49	New York	14.31	4	35	41
50	New Jersey	5.27	4	43	50

Key Findings

Vermont (No. 1), Arkansas (No. 3), and Minnesota (No. 5) offer the most ideal conditions for compact dwellings.
Eight states ban tiny homes or at least require very strict guidelines. They are Alaska, Iowa, Louisiana, North Dakota, New Jersey, New York, Wisconsin and West Virginia.
Iowa (No. 44) leads all 50 states in off-grid lifestyle-friendliness.
Tiny homes can cost as little as $15,000, according to Realtor.com

Thinking about downsizing?

If you think tiny house living is the right lifestyle for you, there are several questions to ask yourself.

Are tiny houses illegal in my state?
In your state, is there a minimum or maximum size for a tiny house?
How much does the average tiny house cost?
How do you finance a tiny house?
Can you insure a tiny house?
Can you buy a tiny house or do you have to build a tiny house yourself?
Can you truly live off-grid in your tiny home?
Where can you store all your stuff?
Are tiny houses a pathway to financial independence/early retirement?

Reducing your carbon footprint

Tiny homes won't take as much energy to heat and cool because of their size. On average, a tiny home consumes 3-4kW of power daily, whereas the average home can consume between 26-33 kW, according to Ecobee.

Size alone isn't the only benefit you'll receive with tiny homes. They feature smaller appliances, placing less stress on the overall energy infrastructure. And many come with smart home features, like smart thermostats to make it easier to manage energy usage.

The bottom line

Tiny homes offer an affordable and cozy alternative to traditional homes. Before considering one, make sure you live in a state that allows them. Also, it's ideal to factor in any challenges that might arise from less space, such as fewer storage options and not as much private space. Overall, tiny homes offer a ton of advantages for homeowners looking to downsize and save on home and energy expenses.

For the past 18+ years, Kathryn has highlighted the humanity in personal finance by shaping stories that identify the opportunities and obstacles in managing a person's finances. All the same, she’ll jump on other equally important topics if needed. Kathryn graduated with a degree in Journalism and lives in Duluth, Minnesota. She joined Kiplinger in 2023 as a contributor.