Freddie Mac Study Shows Rising Use of Accessory Dwelling Units (ADUs) Across US

A recent Freddie Mac study showed that there are 1.4 million properties with Accessory Dwelling Units, or ADUs, in the US. ADUs have seen an increase in popularity over the past few years due to such factors as:

  • a shortage of affordable housing, especially in many urban areas
  • heightened interest among people concerned about the living arrangements for their parents and older relatives
  • rising interest in multigenerational families
  • people interest in owning smaller homes to build credit or to live a simpler lifestyle

These residences were highlighted in The Freedonia Group’s recent study, Prefabricated Housing¸ which discusses not only the market for ADUs in the US, but also provides demand forecasts for manufactured housing, modular housing, precut housing, and panelized housing. ADUs are also discussed in The Freedonia Group’s most recent white paper Tiny Homes a Bright Spot in the Prefabricated Homes Market.

ADUs, also known as tiny houses or granny flats, offer a wide range of benefits to their potential owners, such as:

  • low cost
  • portability
  • can be placed on a lot with an existing residence
  • often feature energy-efficient construction practices to minimize carbon footprints

According to Freedonia Group analyst Matt Zielenski, “ADUs will play an important role in the US housing market going forward. Their low cost makes them ideal for a wide range of consumers, such as older adults on fixed incomes or younger people dealing with student debt.”

The report also indicated that the market for the residences was expected to continue to grow, particularly in many areas of the South and West where population gains and housing shortages are expected to continue going forward.

Zielenski stated that this was not surprising. “Many cities in California are looking to use ADUs to solve the affordable housing crisis in their communities, such as by putting multiple ADUs in lots that were originally zoned for a single residence. Similarly, as older Americans continue to move to the South to take advantage of its climate, communities can create living complexes for seniors by creating communities of ADUs.”