Manufactured Housing Industry Continues to Consolidate

Manufactured housing is a significant portion of the US housing market, making up about one-tenth of new single-family housing in recent years.  However, the industry’s slow recovery from the economic recession and decreased access to credit for buyers has limited growth in demand for new units and created a competitive environment among producers; one that is destabilizing for many small manufacturers.  Consequently, the industry has become increasingly concentrated as small producers close or are acquired by larger manufacturers.  In 2015, the three largest producers of manufactured homes controlled over 70 percent of the US market, a share that has grown in recent years. 

Cavco Industries market share expanding

In 2015, Cavco Industries acquired Fairmont Homes, a significant producer of manufactured homes in its own right.  The acquisition helped Cavco Industries expand its position in the Midwest market through Fairmont Homes’s manufacturing locations in Indiana and Minnesota.  Because of its visibility in the industry, Fairmont Homes continues to operate as an independent brand.  In that same year, Cavco Industries also acquired Chariot Eagle, a smaller producer of manufactured homes and recreational vehicles with operations in Florida. 

These acquisitions have allowed Cavco Industries to position itself as one of the country’s largest producers of manufactured homes.  Additionally, they have allowed Cavco Industries to become more horizontally integrated, expanding its offerings of both modular homes and recreational vehicles.  

Clayton Homes acquires producer and retail locations

Clayton Homes, a subsidiary of Berkshire Hathaway, made several small acquisitions during 2016, expanding both its leading market position in manufactured home production and its network of company-owned retail locations.  In April 2016, the company purchased River Birch Homes.  Its plant became Clayton’s 37th operating manufacturing facility and offers a strategic location in Alabama, near several of the country’s largest state markets for manufactured homes.  In 2016, the company also acquired two distributors, adding a total of seven retail locations to its network of over 300 company-owned outlets. 

To Learn More:

For more information about manufactured housing and other types of prefabricated housing in the United States, check out Prefabricated Housing Market in the US, the newest edition of The Freedonia Group’s comprehensive industry study.  The report includes:

• Demand data and forecasts for manufactured housing, modular housing, precut housing, and panelized housing
• Pricing data and comparisons of prefabricated housing
• Regional demand breakdown and trends
• Legal and regulatory issues analysis
• Market share analysis

About the Author:

Mariel Behnke is an Industry Analyst at The Freedonia Group, where she covers the US and global construction and consumer products industries.