Architect Jay Swayze stated that the idea for the Atomitat was born when he attended a civil defense discussion on fallout shelters. The home completed in 1962 and it was designed during the cold war when Americans feared nuclear war. Swayze said that the Atomitat was designed to be an atomic habitat which met the civil defense specifications.  The cost of the furnished Atomitat with two vehicles was estimated to be $135,000. The Swayze's also stated that because the Atomitat home was secure against damaging weather, their home insurance rate was about 87.5% less than the rate of an above ground home. 
In 1967 the Atomitat was featured in a U.S. Information Agency propaganda film. The film was part of a series showing scenes of American life, and it would be shown in Arab countries.