Last Updated on June 21, 2022 by Luke Feldbrugge
Looking for a house, but not winning any bids? There may be a better way. Manufactured housing is gaining traction as one viable property-purchase solution for the housing affordability crisis the nation is facing currently. Here we break down why this housing option should be on your list too.
In the last month, President Biden outlined a new plan for affordable housing. Among the solutions proposed are steps that would lower costs for manufactured housing by expanding financing options to make purchasing these homes more affordable. Better financing options are a big step toward unleashing the potential of manufactured housing since, traditionally, borrowers looking to finance these homes must rely on personal property loans known as chattel loans. These loans have worse interest rates and shorter payment terms than traditional mortgages. The White House announced that Freddie Mac would consider the feasibility of purchasing these loans to support more market activity and bring down interest rates.
Plus the plan proposes easing barriers around approvals and construction of manufactured housing.
Suppose manufactured housing isn’t on your radar and you are among the many Americans currently competing in the hot housing market. In that case, it may be an excellent time to look at this option.
Benefits of Manufactured Housing
Manufactured housing is affordable because it costs less to build. According to an article from the Urban Institute Initiative, the per square foot cost of producing a manufactured home is less than half the cost of constructing comparable stick-built, single-family detached homes because of greater supply-chain flexibility, regulatory consistency, and lower on-site labor costs.
On average, new manufactured homes cost between $180,000 and $360,000 or $270,000 on average. By comparison, the cost to build a custom home runs from $350,000 to more than $1 million.
Innovative Designs and Custom Features
But cheaper to build doesn’t mean you are buying junk housing. This housing option has improved over the years. Today, manufactured homes are built with high-quality materials and installed according to strict standards. According to the Manufactured Housing Institute, today’s manufactured homes feature innovative designs and custom home features:
- State-of-the-art kitchens
- Luxury bathrooms
- Wood-burning fireplaces
The options for today’s consumers are much more like traditional homes than they were 30 years ago.
Typically Appreciates in Value
And just like traditional homes, manufactured housing also appreciates depending on the market dynamics. This Lending Tree report found that the median value of these homes increased more quickly in 27 states than the median value of single-family homes over the same five-year period.
Getting your foot in on today’s tough housing market can be tough with many barriers. Knowing your options will help you make the best decision as you take this crucial step. Manufactured housing could be a viable option for you and/or your family.