Construction of prefabricated houses scheduled for 15 years high


(iStock)

As the housing sector grapples with widespread accessibility and supply issues, an alternative is gaining ground: manufactured homes.

According to the Census Bureau, home builders are expected to deliver more than 100,000 new homes for the first time since 2006, the Wall Street Journal reported. The houses are assembled in a factory before being installed on site, offering practical advantages over building traditional houses.

Prefabricated houses turn out to be much cheaper than ones built on site, which is part of the reason why they appear as a potential housing solution. In 2020, the average home built on-site would have sold for $ 392,000, or $ 309,000 excluding underlying land costs. Manufactured homes without land cost an average of $ 87,000 in the same year, according to the Journal.

While manufactured homes may be a cheaper alternative, their limited financing options create a different set of problems for homeowners.

According to the Journal, families living in manufactured homes were twice as likely to fall behind on rent or mortgages during the pandemic. About 19 percent of all manufactured home owners were late in the last quarter.

The manufactured home industry has its own hurdles. For starters, some jurisdictions do not allow manufactured homes due to zoning codes that confuse them with trailer parks. Additionally, factories that make homes face the same supply chain issues as the rest of the home construction industry and the economy in general.

These types of homes represent about 9% of new single-family construction, reports the National Association of Homes Builders.

Still, the more affordable alternative could pave the way for homeownership for those stranded by the booming housing market. According to the Journal, only 21 percent of new built-on-site homes sold in September sold for less than $ 300,000, which is still a sizable premium over the average manufactured home sale last year.

[WSJ] – Holden Walter Warner