Texas’ Manufactured Housing Demand Slips, Could Slow in Second Half of 2022

Following is a press release by the Texas Real Estate Research Center (TRERC), that suggests the surging production, shipment, and sales of manufactured homes could possibly slow in the next few months as the overall housing industry and nations’ economy continues to face economic headwinds.

It should be noted that the manufactured housing industry “may” and could “possibly” experience a slowdown in the near future. It is also “possible” that manufactured home production will continue to increase its market share of single-family housing. Over the last several months the production, shipments, and sales of manufactured homes have attained record-setting results, while already battling those economic headwinds.

It would appear that manufactured housing has and will continue to prosper as the deminished affordability of traditional site-built housing virtually eliminates low and middle-income families from homeownership, leaving manufactured homes as the only high-quality affordable housing remaining for American families.

COLLEGE STATION,Tex. (Texas Real Estate Research Center) – Recent recessionary concerns suggest a possible slowdown in manufactured housing sales for the remainder of 2022, according to industry experts and the Texas Real Estate Research Center at Texas A&M University (TRERC).

‘It is now quite obvious that the U.S. economy is slowing,” said TREC Research Economist DR. Harold Hunt. “Mortgage rates are significantly higher than they were a year ago, and that is already putting a damper on the housing market.”

The latest Texas Manufactured Housing Survey (TMHS) sales index registered its lowest reading on record (the series began in June 2020), and activity is expected to slow in the second half of the year.

“There is a wide disparity between economists, however, regarding how much the economy will slow in the months ahead, and employment growth remains strong,” said Hunt.

Manufactured-housing output and payrolls held firm in June, but TMHS respondents contemplated pulling back production as they adjust to weaker demand.

While raw-materials prices fell for the first time in eight months, supply-chain issues continued both upstream and downstream from manufacturers.

“Market dynamics have shifted from supply restraints at the plant level to demand restraints at the retail level,” said Rob Ripperda, vice-presudent of operations for the Texas Manufactured Housing Association. “Texas retailers are battling a lack of transportation and install services to deliver sold homes, falling foot traffic from new customers, and increased inventory costs on any deals that fall through.”

These challenges, combined with impending regulatory changes from the Department of Energy, resulted in heightened uncertainty and a more moderate outlook after a bullish start to the year. Expectations of future interest-rate increases suggest that these headwinds may persist in the foreseeable future.

Recent Posts