Building systems (for example, modular or panelized systems) are an alternative to conventional stick-built construction. According to the manufacturers, building systems offer several advantages. Manufacturing in a controlled factory environment can minimize waste and labor and lead to cost saving. Construction time is generally reduced. The on-going cost of owning system-built homes can also be smaller, as these structures are energy-efficient.
According to the 2014 Survey of Construction data, both the modular and panelized/precut homes newly started in 2014 tend to be geographically concentrated. The total number of newly started single-family modular homes was 10,560 in 2014. More than 80 percent were clustered east of the Mississippi River, with 29% in the South Atlantic division, 22% in the East North Central, 20% in the Middle Atlantic, and 15% in New England (Figure 1). Besides modular homes, there were 10,334 single-family panelized/precut homes started in 2014, with 38% built in the South Atlantic, 25% in the East North Central and 24% in the Middle Atlantic (Figure 2).
Around 3.2% of single-family homes started in 2014 were built using either modular or panelized/precut methods, but market penetration varied across the United States. In the Middle Atlantic, nearly 14% of newly started single family homes were built using one of these two methods, followed by 10% in New England.
The highest adoption rate of modular homes in 2014 was nearly 9% in New England, and then 6% in the Middle Atlantic. For panelized/precut single family homes, the highest market share of newly started homes were in the Middle Atlantic division with around 9%, followed by 4% in East North Central. While a large share of modular and panelized/precut homes were started in the South Atlantic in 2014, that is also where a large share of all starts occur, so market penetration is not particularly high.
For more detail on building system, including the purpose of construction, size and permit value, foundation types, completion time and other physical characteristics, please consult the full study in Housing Economics.