$20,000 Amazon House Could Make Some Neighborhoods More Affordable

A viral video featuring a group of content creators who purchased a tiny home on Amazon might serve as an advertisement for these compact dwellings, as they could be a viable solution for a strained housing market, experts say.

In the context of a housing market grappling affordability issues, with the median-priced home in the U.S. at $413,200 in December, according to the U.S. Census Bureau, it is no surprise that a home purchased for $38,999—available for as low as $20,000—garnered nearly 32 million views on TikTok and was commended as complete and affordable.

According to experts, these tiny homes and accessory dwelling units (ADUs) can help make neighborhoods more affordable, while offering a solution to those would-be buyers who may otherwise be priced out.

Purchased by content creator Nathan Graham, the unfoldable, prefabricated home, measuring 19-feet-by-20-feet, represents a growing trend toward smaller, more affordable living spaces. As seen in the video below, despite its compact size, the house promises quick assembly and essential amenities, albeit without pre-wired electricity.

Graham's prefab home, the Chery Industrial Expandable Prefab House, offers some interesting features for its price, starting with the fact that it unfolds from a large box.

Despite its size, the tiny home offers enough space for basic living, sleeping and includes a built-in toilet and plumbing connections. However, electricity needs professional installation. While Graham paid over $38,000, similar models start as low as $20,000, making it a significantly cheaper option compared to traditional homes.

Newsweek reached out to Graham via email for comment on Monday.

A Viable Solution

The viral video may come off to some as a fun experiment; however, Redfin Chief Economist Daryl Fairweather told Newsweek that she views these small, independent units within or near a primary residence as a tool for increasing housing stock, promoting affordability and even generating income.

"Tiny homes and [ADUs] that add density to an area can help make neighborhoods more affordable to people who may otherwise be priced out," Fairweather told Newsweek via email.

She continued, "I think of ADUs as one tool in our toolbox to promote housing density, especially when combined with policies that promote building more multi-family housing. That's when we can see real progress in bringing down housing costs for all families."

The chief economist said that this is already being done in places like California, where the median-priced home was $774,580 in December, according to the California Association of Realtors. Fairweather told Newsweek that the state is combating the housing affordability crisis by "loosening zoning restrictions so people can build ADUs on their property."

It's not just California. ADUs are capturing attention as a potential solution in several states, including Connecticut, Maine, New Hampshire, Oregon, Utah, Vermont and Washington, where legislation has been passed in favor of ADUs.

But, if actually living in one doesn't fit your lifestyle, Fairweather told Newsweek that savvy homeowners can "rent out these units or house family members who may have otherwise rented or purchased another home in the area."

Have you purchased a tiny home? Newsweek wants to hear about your experience. Contact us at personalfinance@newsweek.com.