Report: Manufactured homes could save lives in housing shortages

Manufactured homes, which tend to be a more popular choice in rural areas, could make a significant contribution to providing more affordable housing, but policymakers will need to make some changes for that to happen, according to a new report examining the issue. .

The Urban Institute recently published a report on the role that manufactured homes could play in alleviating the housing shortage. According to the report by Karan Kaul and Daniel Pang, an additional 3.8 million units would be needed to meet demand. In fact, the National Association of Realtors estimates that a slower annual pace of residential completions from 2001 to 2020 compared to the annual pace from 1968 to 2000 resulted in the construction of at least 5.5 million units under 2001 to 2020.

“We’re 3-6 million units short of where we should be, and that can largely be attributed to underconstruction over the last decade after the housing bubble,” Kaul said in an interview. with the Daily there.

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

The report examines some of the ways that manufactured homes – the preferred term over “mobile homes” after Housing and Urban Development Codes created and implemented codes in the 1970s for increased safety – could s apply to the current housing shortage.

For starters, it’s more affordable to own a manufactured home, according to the report. It says the average selling price of manufactured homes in 2021 was $108,100, excluding land, according to the US Census Bureau’s Construction Survey and Manufactured Housing Survey. By January 2022, the average sale price had risen to $122,500, due to consumer demand, high inflation, and continued labor shortages. By comparison, the average price of new homes built on site in 2021, excluding land, was $365,900. In 2021, the average size of newly built on-site homes was 2,544 square feet, compared to 1,497 square feet for newly built manufactured homes.

“Last year, the average price of manufactured homes was about a third of the average price of an off-site site-built home. And so that’s a huge, huge upside here,” Kaul said.

Still, there are prejudices about manufactured homes, but Kaul thinks that is disappearing as more people realize that manufactured homes can be quality construction.

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

“But the fact is that because of the affordability crisis we’re seeing everywhere…the economics of buying a manufactured home for a homebuyer has just improved dramatically because of the gap price that exists today between the two types of housing. The same is true for landlords 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 of the country and these types of structures account for 13% of all occupied homes in rural and small town communities, according to the Housing Assistance Council.

Still, funding can be difficult, he said.

“Again, this affects both rural consumers and urban consumers, because at the end of the day, if this financing is difficult, and the financing is largely offered to lenders who operate either regionally or nationally, it affects both the rural consumer and the urban consumer,” Kaul said. “So you’re fixing the fact that you’re making it easier for people in the Heartland to actually become buyers of prefabricated houses.

The report notes that furniture financing – or what is also known as personal property not attached to land – is more expensive than mortgage financing. Loans to finance personal property carry higher interest rates, shorter terms and fewer consumer protections than loans on homes titled as real estate.

“Movable property financing is essentially financing that you secure that only pays for the cost of the structure, not the land,” Kaul said.

It’s important to have both options, Kaul said, because some people may not be able to afford the land or the land may not be available for purchase.

“You can’t force people to get a certain type of funding, or force them to encumber the land when they don’t want to,” he said. “I think you have to have an option. There is a lot to be done to make it easier for people to access furniture financing without having to pay these astronomical costs.

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Report: Manufactured homes could be lifeline for housing shortage

Manufactured homes, which tend to be a more popular choice in rural areas, could make a significant contribution to providing more affordable housing, but policymakers will need to make some changes for that to happen, according to a new report examining the issue.

The Urban Institute recently published a report examining the role that manufactured homes could play in alleviating the housing shortage. According to the report by Karan Kaul and Daniel Pang, an additional 3.8 million units would be needed to meet demand. In fact, the National Association of Realtors estimates that a slower annual pace of residential completions from 2001 to 2020 compared to the annual pace from 1968 to 2000 resulted in at least 5.5 million fewer units being built between 2001 and 2020.

“We’re 3-6 million units short of where we should be, and that can largely be attributed to underconstruction over the last decade after the housing bubble,” Kaul said in an interview. with the Daily Yonder.

Prefab housing is more common 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.

The report examines some of the ways in which manufactured homes — the preferred term over “mobile homes” after Housing and Urban Development created and implemented codes in the 1970s for increased safety — could be applicable to the current housing shortage.

For starters, it’s more affordable to own a manufactured home, according to the report. It says the average selling price of manufactured homes in 2021 was $108,100, excluding land, according to the US Census Bureau’s Construction Survey and Manufactured Housing Survey. By January 2022, the average sale price had risen to $122,500, due to consumer demand, high inflation, and continued labor shortages. By comparison, the average price of new homes built on site in 2021, excluding land, was $365,900. In 2021, the average size of newly built homes on site was 2,544 square feet, compared to 1,497 square feet for newly built manufactured homes.

“The average price of manufactured homes last year was about a third of the average price of an off-site, off-lot home. And so that’s a huge, huge advantage there,” Kaul said.

Still, there are prejudices about manufactured homes, but Kaul thinks that is disappearing as more people realize that manufactured homes can be quality. construction.

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

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

Unlike in urban areas, Kaul thinks zoning is probably less of a problem in rural areas. More than half of all prefabricated houses are located in rural areas of the country and these types of structures account for 13% of all occupied houses in rural communities and small towns, according to the Housing Assistance Council.

Still, funding can be difficult, he said.

“Again, it affects rural consumers as well as urban consumers, because at the end of the day, if this financing is difficult, and financing is mainly offered to lenders who operate either at the regional level or at the national level , it affects both rural and urban consumers,” Kaul said. “So you’re fixing that you’re making it easier for people living in the Heartland to actually become manufactured home buyers.”

The report notes that furniture financing — or what is also known as personal property not attached to land — costs more than mortgage financing. Loans to finance personal property carry higher interest rates, shorter terms and fewer consumer protections than loans on titled homes like real estate. structure, not the terrain,” Kaul said.

It’s important to have both options, Kaul said, because some people may not be able to buy the land or the land may not be available for purchase. ;

“You can’t force people to get a certain type of funding, or force them to clutter the field when they don’t want to,” he said. “I think you have to have an option. There is a lot to be done to make it easier for people to access furniture financing without having to pay these astronomical costs. »

This article first appeared on The Daily Yonder and is republished here under a Creative Commons license.

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