Today’s Manufactured Homes Deliver Quality And Affordability Amid An Overheated Housing Market
The following contains excerpts from a USA TODAY editorial by Swapna Venugopal Ramaswamy posted January 20, 2022, titled “Meet the new mobile home: Manufactured houses deliver the American dream amid a tough housing market.”
Priced out of the site-built housing market
As an overheated housing market – marked by double-digit price increases, bidding wars, and inventory shortages – puts the dream of homeownership out of reach of many ordinary Americans, manufactured homes are growing in popularity because their cost is roughly half that of homes built on a permanent site.
Unlike a traditional site-built house, which is constructed at its final location using multiple teams of contractors, a manufactured home is built in an indoor facility and delivered to its location. That lowers costs by improving the efficiency in the home-building process: All the teams needed to build the manufactured home are in the facility, dramatically reducing labor costs.
More than 43,000 land-lease manufactured/mobile home communities exist in the U.S., with an estimated 4.3 million home sites, according to the Manufactured Housing Institute (MHI), a national trade organization. And nearly 22 million people live in manufactured homes.
Or Michaelo, founder of Orbit Homes which makes manufactured homes in California, says the simplicity of completing a house in the factory is what drew him to the business. “It’s cutting the time of construction, the hassle of dealing with all the trades – and the cost is tremendously lower,” he says.
Quality built at half the price of a site-built
The price per square foot for a manufactured home in 2021 was about $57, compared with $119 for a home built in a neighborhood (excluding land), according to the MHI, with quality of construction and building products at least equal and often superior to a site-built home.
A manufactured home between 1.000-2,200 square feet costs $138,00 on average, roughly 40% of the median sales price of an existing home at $362,600 and one-third cost of a new single-family house, at $416,900, says Gay Cororaton, senior economist and director of housing and commercial research for the National Association of Realtors.
For the first time in 15 years, manufactured homes are on track to deliver more than 100,000 units in 2021, a 23% increase over 2016, according to the organization.
Today, manufactured homes refer to homes built on or after June 15, 1976, with construction standards regulated by the Department of Housing and Urban Development. The term “mobile” or “trailer” homes are typically used to describe bare-bones manufactured homes built before 1976.
The quality and durability of manufactured homes have dramatically improved in recent decades to conform to federal and state construction requirements. This has made manufactured homes an affordable and attractive form of housing for many, on either individual lots or in land-lease communities, say industry experts.
“There’s a lot of demand for our homes right now,” says MHI CEO Leslie Gooch. “And that’s because people are looking for that extra space. They are looking to own their own four walls, have outdoor space, enough space for a home office. Today’s manufactured homes are built to a federal building code, are structurally secure and resilient, energy-efficient, and include a wide range of modern features that today’s consumers want.”
Manufactured home values rise
Not just that, over a five-year span ending in 2019, the median value of manufactured homes rose at a faster clip in 27 states than the median value of a single-family home, a new study by LendingTree shows.
That value increased by nearly 40% on average from 2014 to 2019 (the latest census data available), while the median value of single-family homes over the same period increased by 33%, the report says.
The average sales price of a new manufactured home in August stood at $112,000, while the average sales price of a new site-built house with land totaled $481,700. For homeowners who don’t own the land, the average monthly rent for manufactured homes in the U.S.was $568.
Jacob Channel, an economist with Lending Tree, says his company’s report shows that manufactured homes can be a good investment for homebuyers.