Our heads are spinning as we've witnessed the highest house price increases in the U.S. in decades. Home prices rose, on average, 18.8% in 2021, and they have continued this climb throughout 2022.
These prices, coupled with more recent increases in mortgage interest rates, seem to have put the dream of homeownership out of reach for many first-time home buyers. But as home buyers are considering the historically low inventory of traditional stick-built homes, they are increasingly finding surprisingly affordable and delightfully livable options with the availability of manufactured and modular homes.
Let's look at how these homes compare in terms of cost differences, practicality, and long-term value.
First, let's define the meaning and benefits of each type of home.
Stick-built homes are constructed under a process where building materials are delivered to a home site where contractors then assemble these materials, often one "stick" or piece at a time, into the finished home. These homes often take as long as a year to complete. There is an endless range of styles, sizes, and options, including custom-designed and custom-built homes where you have the ultimate say over every square inch.
As these homes are constructed, there are often difficulties and delays associated with weather, availability of contractors and subcontractors, inspections, and coordination of schedules of various subcontracted needs, including plumbing, electrical, drywall, etc. No doubt, every setback adds to the final costs and the timeframe for completion of the home.
Modular homes may also be known as "prefab" or "prefabricated homes." Unlike a stick-built home, a modular home is not constructed on the homesite but is, instead, constructed in sections in an efficient and climate-controlled factory. Sections or rooms have varying degrees of factory-assembly — including electrical work, HVAC ductwork, and windows — are fabricated before they are shipped to the property for final installation.
The added appeal of modular homes is that they can be more quickly erected on either land you are purchasing or land you already own.
Modular home prices have increased at the same rate as stick-built homes in recent years. However, the average base price of a modular home is considerably less than a comparable stick-built home. Why the difference? The building process is simply more efficient.
Factory fabrication of modular homes is not at the mercy of the weather that can slow construction and cause damage. The construction staff is dependable and consistent, enjoying climate-controlled conditions in one location year-round.
Modular homes can be constructed in less than half the time of comparable stick- or site-built homes. Plus, there is much less waste compared to homes built on site, so this home construction is also more eco-friendly.
Studies show, modular home construction is extremely resilient and often even better withstands high winds than some stick-built homes. Building and installation quality standards are clear and consistent, and subject to the same codes as stick-built homes. With multiple inspections performed during the factory fabrication and on-site during installation, you can be assured that a properly installed modular home will safely serve your family's needs for years to come.
Modular homes are available in a broad range of styles and sizes, from ranch designs to multi-story. You can have options to customize aspects of the home, including adding a basement, garage, or porches. And in the end, most people would be hard-pressed to recognize any difference between a modern modular home and a stick-built home.
Manufactured homes are completely constructed in a factory under environmentally controlled conditions. Produced in single-wide, double-wide, and even triple-wide sections, manufactured homes are built with an integrated chassis consisting of a pair of steel i-beams that run the length of the unit.
Construction standards and the versatility of floorplans have evolved drastically since the 1970's. Manufactured homes must be built to strict federal guidelines, as opposed to the modular or stick-built homes that generally follow state and local codes. Their construction is more durable than in the past, and, much like many modular homes, they can be affixed to a permanent foundation.
Today's manufactured homes offer a broad range of floorplans, some exceeding 2,000 square feet, that offer upscale kitchen and bath features, appealing living space with fireplaces, and even porch additions.
As with modular homes, manufactured homes are a great option for those who own land or whose families have parcels of land large enough to add a home.
For many of the same reasons referred above about modular homes, buying a manufactured home can be substantially less expensive than a stick-built home. Home manufacturers are building these homes consistently with assembly-line efficiency, allowing them to get the best prices on materials.
Manufactured homes offer the added benefit of flexibility. You can place your home on a homesite that you own or will purchase. But you can also put your home in a community specially designed for manufactured homes and rent your site. Some of these communities offer amenities such as pools, clubhouses and even include regular maintenance.
According to U.S. News & World Report, "The U.S. Census Bureau reports the average sale price of a new manufactured home was $111,900 in November 2021, the most recent average price available. Compared with a traditional house built on a foundation, a manufactured home is typically more affordable. The Federal Reserve Bank of St. Louis reports the median sale price of a new house sold in February 2022 was $400,600."
While considering the cost savings in purchasing a manufactured or modular home, new home buyers are smart to consider all the options available to them as they pursue house hunting.As the nation's number one lender for manufactured and mobile homes for more than 12 years, you can rely on your friends at 21st Mortgage. We're here to assist you with questions, and lending needs — we can even help find a pre-owned home for you. We're happy to share useful tips and resources to help you in your home buying discovery process. Contact us today.
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