The total market share of non-site built single-family homes was 3.3% of single-family completions in 2017, according to Census Bureau Survey of Construction data and NAHB analysis. This share is expected to rise in 2018 and in the years ahead, due to the ongoing labor shortage in the residential construction sector and the need to lift labor productivity amid declining housing affordability.
For 2017, there were 26,000 total single-family units built using modular (12,000) and panelized/pre-cut (14,000) construction methods, out of a total of 795,000 total single-family homes completed. While the market share is small, there exists potential for expansion. Moreover, this 3.3% market share for 2017 represents a decline from years prior to the Great Recession. In 1997 and 1998, 7% of single-family completions were modular (4%) or panelized (3%). This marked the largest share for the 1992-2017 period.
One notable regional concentration is found in the Northeast where more than 5% (3,000 homes) of the region’s 59,000 units completed were due to modular construction.
With respect to multifamily construction, approximately 2% of multifamily buildings (properties, not units) were built using modular and panelized methods. Similarly to single-family construction, this market share is expected to grow, but it was also larger in years past. In the year 2000, 5% of multifamily buildings were constructed with modular (1%) or panelized construction methods (4%). It is worth noting that the market share of 50+ unit apartment unit construction was considerably lower in 2000 (14%) than in 2017 (52%).
Does this study include manufactured homes constructed to the HUD building code?
Modular homes constructed to a local building code like the IRC can have two different types of structure.
“On frame or on chassis” modular homes have a steel chassis/undercarriage/frame that provides the support for the home. They are not eligible for Fannie Mae or Freddie Mac, which limits the available of funds for purchase or refinance. They are acceptable to FHA/HUD, USDA and VA.
“Off frame or off chassis” modular homes, which do not have a steel chassis/undercarriage/frame are eligible for all types of financing.
I am a certified residential appraiser that specializes in factory built homes and have had several articles that have been published in national appraiser magazines, newsletters, blogs, chat rooms, etc. The first article I wrote in 2001 was used as a reference source by FHA/HUD.
These estimates do not include manufactured housing units.
Thank you. What about the on frame and off frame modulars? Many manufacturers build manufactured homes, on frame and off frame modulars, Park Models in the same factories in the same assembly lines. The on frame and off frame modulars are the same floor plans, options, upgrades, materials as the manufactured homes. The difference is the variation of building codes that are followed. Manufactured to the HUD building code. Modulars to the IRC building code-previously to the UBC building code.
Fannie Mae and Freddie Mac have now changed their policies and will accept on frame/on chassis modular homes.