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Freedonia Market Research Press Releases Manufactured Housing to Reach 85,000 Units in 2020

Manufactured Housing to Reach 85,000 Units in 2020

by Corinne Gangloff

January 30, 2017

In 2020, manufactured housing shipments are expected to reach 85,000 units, declining as a share of total single-family housing starts and manufactured housing placements.  Manufactured housing’s share of all single-family housing units was elevated in the 1990s due to very accessible credit, but declined through 2005 as the industry became more wary of its former easy credit policies, while lower interest rates and new financial instruments for subprime borrowers made conventional housing a more attractive option for many home buyers.  However, faced with higher mortgage interest rates when their adjustable-rate loans were reset, amplified when the Federal Reserve tightened its monetary policy in 2005, many borrowers defaulted on their mortgages.  This created tremendous volatility in financial markets and forced many lenders to change their practices.  Furthermore, this led to a glut of repossessed houses in the market and limited any demand gains in manufactured housing. These and other trends are presented in Prefabricated Housing Market in the US, 14th Edition, a new study from The Freedonia Group, a Cleveland-based industry research firm.

The manufactured housing industry is impacted by a variety of regulatory issues on both local and federal levels, both positively and negatively.  According to analyst Mariel Behnke, “Among the most significant of the many regulatory issues facing the manufactured housing industry is the HUD Code.”  This federal set of standards allows many manufactured housing producers to operate across state lines disregarding a plethora of local codes.  Other regulatory issues facing the industry include local zoning and transportation regulations, manufactured housing community ownership, and financing concerns. 

Manufactured homes appeal to a wide range of individuals, particularly due to their affordability relative to site-built housing.  In 2015, the median household income of manufactured home owners was approximately $28,400, with over three-fourths having annual incomes below $50,000.  As prices for comparable site-built homes rise, manufactured housing will attract more first time home buyers and other consumers seeking an affordable alternative.  However, new trends in design, additional value-added features, and increasing availability of multisection units will attract higher-income customers.

Prefabricated Housing Market in the US, 14th Edition (published 01/2017, 166 pages) is available for $4900 from The Freedonia Group.  For further details or to arrange an interview with the analyst, please contact Corinne Gangloff by phone 440.684.9600 or email [email protected].

Related studies include:

#3474 Molding & Trim in the US (November 2016)

#3436 Residential Roofing (August 2016)

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