With construction and materials costs skyrocketing, many are looking for ways to make housing more affordable. Modular and manufactured homes are a great way to cut costs, offering shorter construction times, reduced waste, and more flexibility compared to traditional builds.
In this post, we look at the difference between modular and manufactured homes to help you understand their benefits and guide your decision. Let the modular vs manufactured home battle commence!Â
Table of content
What is a modular home? Benefits of modular homes Limitations of modular homes What is a manufactured home? Benefits of manufactured homes Limitations of manufactured homes What's the difference between modular and manufactured homes? Assembly Transportability Customization Codes and regulations Cost Financing options Depreciation Modular vs manufactured home: which should I choose?
What is a modular home?
When comparing a modular vs manufactured home, it’s important to first understand each of these.
Modular homes are constructed from large, prefabricated sections rather than being built on site from the ground up. Each module is assembled in a factory and then shipped to the lot to be put together to form a new home.
As with traditional builds, modular homes are placed on a permanent foundation and can even have basements. Once built, they cannot be moved. However, you can expand a modular home by installing additional modules after the initial installation.
One of the more common examples of a modular home uses shipping containers as lower-cost modules. The containers can be modified to include windows and doors, and welded together in various configurations to create larger homes.Â
Benefits of modular homes
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Costs: Modular homes tend to cost around 15% less than traditional builds. This may not seem a lot, but when you consider the average cost to build a house is $298,136, that’s a saving of almost $45,000.
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Quicker to build: Modular homes are made up of individual parts that are constructed in a warehouse before being shipped to the lot. This means the building process doesn’t have to contend with weather issues that may slow it down.
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Personizable designs: Shipping container builds are cost-effective and functional, but they aren’t the most attractive option for a home. Modular homes can be configured to a number of specifications which allow them to be built with the owner’s design in mind. It also allows modular homes to be built with an aesthetic that matches the local area, even when surrounded by traditionally built homes.
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Subject to federal quality controls and standards: Modular homes have to comply with local building codes and production facilities are subject to federal quality controls and standards. This means that modular homes are high quality and owners can be certain they’re building a safe property to live in.
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Energy efficient: Modular homes are often more energy efficient than traditionally built homes. This adds to the savings for owners as utility bills can be lower.
Limitations of modular homes
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Location: Location plays a huge part in how beneficial a modular home could be. If the land you buy requires work to build upon, or if the cost of the land is expensive, you may not see any savings from choosing a modular home. Local laws and regulations may also make it difficult to build a modular home, or not possible at all.
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Financing: In most cases, you can finance a modular home in the same way as a traditional build. However, the downpayment is usually higher for a modular home, and some banks may not classify them in a way that is suitable for a loan.
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Cost to connect to utilities: When building a modular home, you need to consider connecting utilities such as electric, plumbing, and ductwork. This can cost anywhere between $3,000 and $30,000.
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Cost of site prep: As with traditional builds, building a modular home requires a level surface free of obstructions. Depending on the land you’re looking to build on, this can involve multiple steps including land survey, land clearing, excavation, and land surveying. Site prep can cost anywhere between $3,000 and $11,300.
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Cost of foundations: Modular homes need to be built on a solid foundation. There are multiple options including pier and beam foundations, crawl spaces, basements, or stilts and pilings. This can cost $3,000 and $30,000.
What is a manufactured home?
As the name suggests, manufactured homes are built entirely in a factory and then transported to the site. Manufactured homes are built on a fixed, steel chassis and usually come with wheels, which are then removed once the home reaches its desired location.
Manufactured homes are often compared to trailers and mobile homes as they share similar characteristics. Like trailers and mobile homes, they are not built on a foundation and can be moved if required, but manufactured homes can have different floor plans and architectural styles to make them look more like traditionally-built homes. They can also be expanded, much like a modular home.Â
Benefits of manufactured homes
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Cheap: Manufactured homes are typically the cheapest option for prospective homeowners. As of February 2022, the average sale price of a manufactured home was $128,000,
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Durable: Manufactured homes have a misconception that they are poorly built, or less durable than other forms of housing. However, all manufactured homes are required to be built in line with the National Manufactured Housing Construction and Safety Standards Act of 1974.
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Quick to build:Â As manufactured homes are built entirely in a factory, they can be built far more quickly than traditional builds.
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Manufacturer warranty: Manufactured homes come with a warranty from the manufacturer that will cover you if something goes wrong with the home.
Limitations of manufactured homes
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Depreciate quickly -Â Manufactured homes start depreciating straight away, unlike modular and traditional builds which ebb and flow with the market.
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Fewer loan options -Â Few lenders will offer a mortgage on a manufactured home, leaving buyers with less financing options compared to modular or traditional builds.
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Hard to personalize -Â Typically it is tougher to personalize manufactured homes as designs tend to be fixed by the manufacturer.Â
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Limited locations -Â Manufactured homes are not available to purchase everywhere. They also may not be allowed in certain areas due to local laws and regulations.
What's the difference between modular and manufactured homes?
In the battle of modular vs manufactured homes, we’ve compared a range of factors, including cost, ease of assembly, transportability, customization, and more to assess which is best suited to what needs
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Modular |
Manufactured |
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Assembly |
Built in a factory in sections (or modules) and shipped to site to be put together. |
Built in a factory as an entire unit. |
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Transportability |
Permanent |
Can be moved |
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Customization |
Can be configured to different layouts and added to at a later date. |
Tough to customize. Tend to follow the generic design set by the manufacturer. |
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Codes and regulations |
Must comply with local building codes and production facilities are subject to federal quality controls and standards. |
Regulated by the Department of Housing and Urban Development unless built before June 15, 1976 |
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Cost |
$40 to $80 per square foot |
$40 to $50 per square foot |
|
Financing options |
Limited, but mortgages are available |
More limited, mortgages are not given |
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Depreciation |
Follows the housing market |
Starts depreciating immediately |
Assembly
Both modular and manufactured homes are built within a factory rather than on site. However, modular homes are built in sections which are transported to the site for final completion. Manufactured homes are built entirely within the factory and then shipped to the location.
Transportability
While modular and manufactured homes are transported from the factory to their intended location, only manufactured homes can be moved after installing them. Modular homes need to be fixed and placed on a foundation, while manufactured homes have the option to be permanent or move if required.
Customization
Modular homes offer more customization than a manufactured home. Modular homes can be configured to a number of specifications and offer a range of styles. Manufactured homes also have a selection of styles but are tough to customize once they’ve been built.
Codes and regulations
Modular homes need to meet the requirements of local, state, and federal building codes that traditionally built homes do. Manufactured homes are regulated by the Department of Housing under the Urban Development National Manufactured Housing Construction and Safety Standards Act of 1974.
Cost
Manufactured homes are typically cheaper than modular homes for a number of reasons. Manufactured homes are shipped as a single unit, which can be cheaper than shipping individual modules. They also use lighter-weight materials and less expensive construction methods.
As the specifications are the same from unit to unit, manufactured houses can be produced in bulk rather than the custom nature of modular homes. This also helps to lower costs.
Financing options
Financing for modular and manufactured homes can be more difficult than traditional build homes. However, financing for manufactured homes can be much tougher than a modular home, as most institutes will not offer mortgages for manufactured homes.
Depreciation
For those looking at modular homes as an investment, they tend to reflect the market value alongside traditionally built housing. Manufactured homes, however, tend to depreciate straight away.Â
Modular vs manufactured home: Which should I choose?
When comparing modular vs manufactured homes, it’s worth noting that they both offer a cheaper solution for those looking to build a new property. However, they’re not without their setbacks.
If you’re looking to settle down, modular builds can give you a more permanent solution with scope to expect your home if you need to. However, if you’re in need of a low-cost home with the option to transport it to a new location, a manufactured home may be exactly what you need.
Drafting up an example site plan is a great way to start visualizing your new home before you have to commit to any costly decisions, and MySitePlan can create a mockup in as little as 24 hours.Â
What is a modular home?
A modular home is a type of house constructed from large, prefabricated sections. These sections are often assembled in a factory and then shipped to the final building site to be assembled.
Just like traditional homes, modular homes are built on permanent foundations.Â
What is a manufactured home?
Manufactured homes are houses that are built entirely off-site in a factory and then transported fully assembled to a building site. They are built on a fixed steel chassis and often have wheels that are removed once the house reaches its destination.
Manufactured homes are not built on traditional foundations and can be moved after installation.Â
What are some of the benefits of modular homes?
Modular homes have a range of benefits, including:
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Lower costs: Modular homes usually cost around 15% less than more traditional houses.
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Short built times: Because modular homes are made up of pre-constructed sections, the building process is quicker than traditional house construction.
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Energy efficient: Many modular homes are built to be more energy efficient than traditional houses, meaning modular homeowners will have lower utility bills.
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Customizable: Modular homes can be highly customizable and configured in different layouts to create truly customized homes based on owners’ dream designs.Â
What are some of the benefits of manufactured homes?
Manufactured homes have their own unique benefits, like:
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Affordable: Manufactured homes are one of the most affordable housing options for homeowners. The average sale price for a manufactured home was $128,000 as of February 2022.
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Durable: Because they are subject to the National Manufactured Housing Construction and Safety Standards Act of 1974 , manufactured homes in the United States are often just as or more durable than traditionally built homes.
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Come with a warranty: Manufactured homes come with a warranty from the supplier, giving homeowners peace of mind if something goes wrong.
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Movable: Because manufactured homes are not built on traditional foundations, they can be moved to a new location after being built, giving homeowners the opportunity to move their existing homes to a new location.Â
What is cheaper, a modular or manufactured home?
In most cases, manufactured homes are cheaper than modular homes. However, this doesn’t take into account the cost of the land where you’ll build your home.
It’s also important to note that modular and manufactured homes have different financing options available. Modular homes can be financed with a construction loan, just like traditional new-build homes. Meanwhile, because manufactured homes are not considered traditional real estate but instead personal property, they can only be financed with a private personal loan, which may have higher interest rates.
Manufactured homes also depreciate in value more quickly than modular homes.
In most cases, manufactured homes are cheaper than modular homes. However, this doesn’t take into account the cost of the land where you’ll build your home.
It’s also important to note that modular and manufactured homes have different financing options available. Modular homes can be financed with a construction loan, just like traditional new-build homes. Meanwhile, because manufactured homes are not considered traditional real estate but instead personal property, they can only be financed with a private personal loan, which may have higher interest rates.
Manufactured homes also depreciate in value more quickly than modular homes.Â
