Report: Manufactured Homes Could Be Lifesaver For Housing Shortage

Manufactured homes, which tend to be a more popular choice in rural areas, could help significantly in providing more affordable housing, but policymakers will need to make some changes for that to happen, according to a new report examining the issue, as reported by the Daily Yonder.

The Urban Institute recently released a report looking at the role manufactured homes could play in easing the housing shortage. According to the report by Karan Kaul and Daniel Pang, it would take an additional 3.8 million units to meet demand. In fact, the National Association of Realtors estimates that a slower annual pace of residential completions from 2001 to 2020 relative to the annual pace from1968 to 2000 has resulted in at least 5.5 million fewer units being built from 2001 to 2020.


U.S short somewhere between 3 to 6 million new homes

“We’re somewhere in between 3 to 6 million units short compared to where we ought to be, and that can largely be attributed to under-building in the last decade or so after the housing bubble,” Kaul said in an interview with the Daily Yonder.

Manufactured housing is more prevalent in rural areas, according to Prosperity Now. In 2017, manufactured homes made up about 3% of all urban housing and 15% of all rural housing, according to the American Housing Survey.


Average price of a new site-built home is $365,900 – A new Manufactured Home is $108,100

To start with, it’s more affordable to own a manufactured home, according to the report. It says the average sales price for manufactured homes in 2021 was $108,100, excluding land, according to the U.S. Census Bureau’s Survey of Construction and its manufactured Housing Survey. As of January 2022, the average sales price had increased to $122,500 due to customer demand, high inflation, and continued labor shortages. In comparison, the average price of new site-built homes in 2021, excluding land, was $365,900.

“The average price of manufactured homes last year was about a third of the average for a site-built home excluding land. And so that’s a huge, huge advantage right there,” Kaul said.

Still, there is prejudice about manufactured housing, but Kaul believes that is going away as more people realize that manufactured homes can be quality constructed.

Kaul said manufactured homes have traditionally been more of a rural product than an urban one and believe that will remain the case.

“But the point of the paper is that because of the affordability crisis we’re seeing everywhere……the economics of buying a manufactured home for a homebuyer has just improved drastically because of the price differential that exists today between the two types of housing. The same holds true for homeowners in rural areas,” he said.

Unlike in urban areas, Kaul thinks zoning is probably less of an issue in rural areas. More than half of all manufactured homes are located in rural areas around the country and these types of structures make up 13% of all occupied homes in rural and small-town communities, according to the Housing Assistance Council.

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