There have never been more options available in home building than there are today, and yet site-built construction remains the predominant method of building single-family homes. According to analysis from the Urban Institute, site-built (also known as stick-built) construction accounts for 97% of new single-family homes. In fact, over the last two decades, factory-built homes fell from 5% to 3% of single-family home production, peaking just before 2008. Despite this trend, factory-built homes—also referred to as prefabricated, or “prefab,” homes—offer unique opportunities to address the nation’s housing supply challenges. “Factory-built has the potential to not only increase supply but also help solve affordability issues,” says Michael Neal, principal research associate and equity scholar at the Urban Institute. “Prefabricated houses are the best-kept secret in America,” says Sheri Koones, a prolific writer on the variety and value of prefab homes. Koones regularly encounters a general lack of knowledge and prevalent misconceptions among consumers. One common confusion is the difference between modular and manufactured homes.

While both modular and manufactured homes are assembled in factories, they are built to two different codes. Manufactured homes, previously called “mobile homes,” are built on permanent metal chassis in compliance with the federal Manufactured Housing Construction and Safety Standards, also called the HUD code, which preempts state and local codes. Modular homes are built to the same International Residential Code, or IRC, as site-built homes and must conform to state and local regulations. Modular homes are being built and delivered across America. “We’re designing houses for literally all around the country,” says Geoffrey Warner, principal architect and owner of Alchemy, based in St. Paul, Minn. Primarily what has been driving modular is really the cost of land and the cost of construction. I think that people are starting to realize that modular makes sense because we’re experiencing labor shortages across the country.”

Source: REALTOR® Magazine