The total market share of non-site built single-family homes (modular and panelized) declined to 3% of single-family completions in 2019, according to Census Bureau Survey of Construction data and NAHB analysis. This share is expected to rise moderately in 2020 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 2019, there were 24,000 total single-family units built using modular (11,000) and panelized/pre-cut (13,000) construction methods, out of a total of 903,000 total single-family homes completed. While the market share is small, there exists potential for expansion. Moreover, this 3% market share for 2019 represents a decline from years prior to the Great Recession. In 1998, 7% of single-family completions were modular (4%) or panelized (3%). This marked the largest share for the 1992-2018 period.
One notable regional concentration is found in the Northeast where 6% (3,000 homes) of the region’s 62,000 units completed were due to modular construction, the highest share in the country.
With respect to multifamily construction, approximately 1% of multifamily buildings (properties, not units) were built using modular and panelized methods. Similarly to single-family construction, this market share was expected to grow, but the expected gains did not materialize due to various constraints in the industry. In the year 2000 and 2011, 5% of multifamily buildings were constructed with modular (1%) or panelized construction methods (4%).