Will This One Thing Solve the Housing Shortage in the U.S.?

Once finished, you won't be able to tell the difference between a modular home and a site-built house.

The Washington Post reports that the U.S. would need an estimated 3.8 million housing units to deal with the current housing shortage. One possible solution is to embrace the manufacturing of modular homes.

What is a modular home?

A modular home, sometimes called a "prefabricated home," is built in a factory. When it's about 80% to 90% complete, it is transported to a building site where a crane operator sets each piece on its permanent foundation. Once built, a modular home is indistinguishable from a traditional stick-built home.

Modular homes are not to be confused with mobile homes. Modular homes are built to the same local, state, and regional building codes as a home stick-built on site. They are permanently affixed to a foundation and constructed to last for generations. This is different from a mobile home, which can be picked up and transported from one lot to another.

At one time, modular homes were known solely for being a cheap and fast way to build a house. While building a modular home still takes less time and money, today's modular homes offer advantages not found in most traditionally-built homes. At issue is how difficult it can be to shake a bad reputation, even when it no longer applies.

Is a modular home inferior to a stick-built house?

If your stick-built house were constructed inside a weather-controlled factory under strict conditions and transported to your building site, it would be considered a modular home.

Builders use all the same materials as a stick-built house to construct a modular home. Traditional and modular homes have identical building codes, and both are built to last.

Here are three ways stick-built and modular homes are different:

1. Traditional homes are built on-site and modular homes are primarily constructed in a factory.
2. Critical elements of a modular home, like plumbing and HVAC, undergo quality control testing before leaving the factory.
3. Due to the number of quality control measures a modular home must pass through before leaving the factory, there is far less risk of hidden cost-cutting measures.

Advantages of modular homes

As the modular home industry has grown and refined its processes, modular homes have some advantages over most stick-built homes. For example:

• Depending on the finishes chosen by the home buyer, a typical modular home costs 10% to 20% less to build than a stick-built home. This may help home buyers afford a bit more home than they would otherwise qualify for.
• Most mortgage lenders treat modular homes the same as they treat site-built homes.
• Not only are modular homes inspected on-site by local inspectors before move-in day, but they are also routinely inspected throughout the building process.
• A modular home can be built at the factory in four to eight weeks, far less time than it takes to build a traditional home.
• Modular homes are typically built to be more energy efficient than stick-built homes, saving the homeowner money on utility bills.

A FEMA study also showed modular homes are better equipped to withstand wind than site-built homes.

Conclusion

Manufacturing family homes at a lower cost and in less time may be the ideal way to fill the housing gap in the near future. To do so, however, the building industry must help consumers overcome their preconceived notions about modular homes.