With housing costs on the rise, it’s smart to look for more affordable options. Modular and manufactured homes often seem like the perfect solution, promising lower prices and faster builds. But don’t be fooled by the similarities. The financial futures of a modular manufactured home are worlds apart. One is legally classified as real estate and builds equity. The other often depreciates in value, much like a car. Before you commit to one, it's crucial to understand how these differences in financing and resale value will impact your long-term financial goals.
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!
Table of content
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.
Benefits of modular homes
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.
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.
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.
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.
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.
Eco-Friendly Construction
Building a home in a factory setting is a much more controlled process, leading to significantly less material waste than a typical construction site. This precision also results in a tighter build. Modular homes are often more energy efficient than traditionally built homes, with better insulation and sealing against the elements. This adds to the savings for owners, as utility bills can be lower over the home's lifetime. For anyone prioritizing sustainability, the modular approach offers a clear advantage. It helps minimize environmental impact from the start, supporting green building principles and creating a smaller footprint for your new home.
A Less Stressful Building Experience
Anyone who has managed a construction project knows how stressful delays can be. Because modular homes are made up of individual parts constructed in a warehouse, the building process doesn’t have to contend with weather issues that may slow it down. This controlled environment leads to a more predictable timeline from start to finish. Reputable builders focus on high quality and good prices, making the experience smoother for the homeowner. Getting your project off to a seamless start involves having all your paperwork ready, including a professionally drafted site plan for your permit application, which helps avoid any early holdups with your local building department.
The Modular Construction Process
The way modular homes are built is what really sets them apart. It’s a streamlined process that combines factory precision with on-site construction, leading to a faster and often more predictable build. Unlike a traditional home that is built entirely on your property over several months, a modular home takes a parallel approach. This means different parts of the project happen at the same time, which is a huge time-saver. While your home's modules are being constructed in a controlled environment, you can work on getting your land ready. This includes clearing the lot, grading the soil, and pouring the foundation, all of which require permits from your local building department.
Parallel Site and Factory Work
One of the biggest advantages of modular construction is its efficiency. 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. While the factory is busy building the walls, floors, and ceilings of your new home, you and your contractor can focus on preparing the site. This is the perfect time to get your paperwork in order, including the site plan for your permit application. Getting a head start on the foundation and utility hookups ensures that when the modules arrive, they can be set in place without delay.
Quality Control and Brand-Name Materials
There’s a common misconception that factory-built means lower quality, but for modular homes, the opposite is often true. 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. The construction process happens indoors, protecting materials from weather damage like warping or mold. Plus, inspections happen at every stage in the factory, which can lead to a more consistently well-built home than one exposed to the elements and reliant on varying subcontractor schedules.
Types of Modular Buildings
The term "modular" might make you think of a simple, boxy design, but the reality is much more exciting. Modular construction is incredibly versatile and can be used to create a wide range of buildings, from single-family homes to large apartment complexes. You can find modular designs in almost any style, including Craftsman, Colonial, and modern farmhouses. The flexibility of this building method allows for custom floor plans and high-end finishes, just like a traditional stick-built home. Whether you're adding a small unit to your backyard or developing a multi-family property, there's likely a modular solution that fits your needs.
Modular Home Additions
Feeling cramped but love your neighborhood? A modular addition could be the perfect solution. You can expand a modular home by installing additional modules after the initial installation, but this method works for traditional homes, too. A modular addition is built off-site and then attached to your existing home, minimizing the disruption, noise, and mess that typically comes with a major renovation. This is a fantastic way to add a primary suite, a new family room, or an in-law apartment. Just remember that any addition, modular or not, will require approval and permits from your city or county, which includes submitting a detailed site plan showing the changes to your property.
Accessory Dwelling Units (ADUs)
Accessory Dwelling Units, or ADUs, have become incredibly popular as a way to add living space for family members or to generate rental income. These smaller, secondary homes on your property can be built using modular construction, making the process faster and more affordable. Because they are built in a factory, the on-site disruption is minimal—once the foundation is ready, the unit can often be installed in just a few days. Getting a permit for an ADU is a critical step, and your application will need a site plan that clearly shows the location of the new unit, property lines, and any existing structures.
Multi-Family Buildings
Modular construction isn't just for single-family homes; it's also a game-changer for developers building multi-family properties. Companies now offer modular designs for townhouses, condos, and apartment buildings. The speed of modular construction is a huge asset for these larger projects, as it allows developers to complete construction and begin leasing units much faster than with traditional methods. This can have a significant positive impact on a project's overall budget and timeline. For contractors and developers, getting the initial planning right is key. We provide site plans for commercial projects that meet the requirements for permitting these larger-scale modular builds.
Limitations of modular homes
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.
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.
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.
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.
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.
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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.
Manufactured Home Sizes
Manufactured homes come in standard sizes, which helps simplify the selection process. Before placing one on your property, you'll need a permit, which almost always requires a detailed site plan showing its placement. Understanding the different types of manufactured homes and their dimensions will help you choose the right fit for your lot and your lifestyle. Whether you're a first-time buyer or need space for a growing family, there's a size that's just right.
Single-Wide
Single-wide homes are the most compact and budget-friendly option. As the name implies, they are built and transported as one single section. They typically measure between 12 and 18 feet in width and can be up to 90 feet long, offering a linear, easy-to-manage floor plan. This smaller footprint makes them a fantastic choice for individuals, couples, first-time homebuyers, or anyone looking to downsize their living space without sacrificing the dream of homeownership. Their efficiency and affordability are hard to beat.
Double-Wide
If you need more room to spread out, a double-wide manufactured home is a popular step up. These homes are constructed in two separate sections in the factory, which are then transported to your property and joined together. This method creates a much wider living space, generally ranging from 20 to 36 feet wide and up to 90 feet long. The larger size allows for more diverse and spacious floor plans that often feel similar to a traditional site-built home, making them an excellent option for families or anyone who wants more defined living areas.
Triple-Wide
For those seeking the most space a manufactured home can offer, there are triple-wide models. Also known as multi-section homes, these are built in three separate parts and assembled on-site to create an expansive residence. With widths starting at 36 feet and going up, triple-wides provide layouts that are virtually indistinguishable from traditional homes. They can easily accommodate multiple bedrooms and bathrooms, large kitchens, and open-concept living areas, making them perfect for large families or homeowners who love to entertain.
Benefits of manufactured homes
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.
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.
Quick to build: As manufactured homes are built entirely in a factory, they can be built far more quickly than traditional builds.
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
Depreciate quickly - Manufactured homes start depreciating straight away, unlike modular and traditional builds which ebb and flow with the market.
Fewer loan options - Few lenders will offer a mortgage on a manufactured home, leaving buyers with less financing options compared to modular or traditional builds.
Hard to personalize - Typically it is tougher to personalize manufactured homes as designs tend to be fixed by the manufacturer.
Limited locations - Manufactured homes are not available to purchase everywhere. They also may not be allowed in certain areas due to local laws and regulations.
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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
Modular |
Manufactured |
|
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. |
Transportability |
Permanent |
Can be moved |
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. |
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 |
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 |
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.
Design Flexibility and Floor Plans
One of the biggest advantages of modular homes is their design flexibility. Because they are built in sections, modular homes can be configured to a number of specifications, allowing them to be built with the owner’s design in mind. You can choose from many different floor plans and customize your home with hundreds of decor options, like paint colors, flooring, and cabinets. This means you can create a space that truly fits your lifestyle, whether you want an open-concept living area or a more traditional layout. Planning these customizations starts with a clear vision of your property, which is where a detailed site plan becomes invaluable for visualizing placement and potential future additions.
Architectural Styles and Finishes
Beyond the floor plan, modular homes offer a surprising range of architectural styles. Forget the idea of a one-size-fits-all box; modern modular builders offer many styles, including Craftsman, Colonial, Ranch, and even multi-family townhouses. This variety ensures that modular homes can be built with an aesthetic that matches the local area, even when surrounded by traditionally built homes. This adaptability makes them a great option for various projects, from primary residences to Accessory Dwelling Units (ADUs). In contrast, manufactured homes typically offer fewer options for exterior finishes and architectural details, often adhering to a more standardized look.
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.
The Importance of a Site Plan for Permitting
Whether you choose a modular or manufactured home, you'll almost certainly need a permit from your local building department before installation can begin. A crucial part of that permit application is a detailed site plan. This is essentially a map of your property, showing the layout, where the new home will sit, and other important features like driveways, setbacks from property lines, drainage, and utility connections. Your local officials use this drawing to verify that your project complies with all zoning laws and building codes. Submitting a clear, professional site plan from the start is one of the best ways to ensure a smooth permitting process and avoid any costly delays.
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.
Initial Price vs. Total Project Cost
While the sticker price for a modular or manufactured home is often lower, it's crucial to look at the total project cost. A modular home can cost about 15% less than a traditional build, which is a significant saving. However, that initial price doesn't include everything. You'll also need to budget for site preparation, which includes clearing the land and ensuring it's level. This is also when you'll need to get a site plan for your building permits. Then there's the cost of a foundation, plus connecting all your utilities like water, sewer, and electricity, which can add thousands to your final bill. These 'extra' costs can range from $3,000 to over $30,000, so be sure to factor them into your budget from the start.
Long-Term Value and Ongoing Expenses
When you think about long-term finances, the differences between modular and manufactured homes become even clearer. A modular home, once placed on its permanent foundation, is considered real property. Its value tends to appreciate and depreciate right along with the local housing market, just like a traditionally built house. On the other hand, a manufactured home is often classified as personal property, and like a car, it starts to depreciate as soon as you buy it. Beyond resale value, consider ongoing expenses. Modular homes are often built to be very energy-efficient, which can lead to lower monthly utility bills and long-term savings.
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.
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.
FAQs
What is a modular home?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.
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.
What are some of the benefits of modular homes?
Modular homes have a range of benefits, including:
Lower costs: Modular homes usually cost around 15% less than more traditional houses.
Short built times: Because modular homes are made up of pre-constructed sections, the building process is quicker than traditional house construction.
Energy efficient: Many modular homes are built to be more energy efficient than traditional houses, meaning modular homeowners will have lower utility bills.
Customizable: Modular homes can be highly customizable and configured in different layouts to create truly customized homes based on owners’ dream designs.
What are some of the benefits of manufactured homes?
Manufactured homes have their own unique benefits, like:
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.
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.
Come with a warranty: Manufactured homes come with a warranty from the supplier, giving homeowners peace of mind if something goes wrong.
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.
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.
About the author
Ryan Crownholm
Ryan is a construction technology founder and former contractor with 15 years of hands on experience in residential and commercial construction. He has been creating site plans for more than 25 years, supporting tens of thousands of homeowners and contractors across the United States. As the founder of MySitePlan.com, his work is grounded in real world permitting requirements, plan review feedback, and practical compliance standards used by local building departments.
Key Takeaways
- Know the core distinction for your investment: Modular homes are built in sections and assembled on a permanent foundation, legally classifying them as real estate that can build equity. In contrast, manufactured homes are built completely in a factory and often depreciate in value, similar to a vehicle.
- Evaluate the long-term financial picture: Your choice has significant financial consequences beyond the initial price. Modular homes often qualify for traditional mortgages and appreciate with the housing market, while manufactured homes have more restrictive financing and lose value over time.
- Budget beyond the sticker price: The initial cost of the home is just one piece of the puzzle. You must also account for expenses like land, site preparation, foundation, utility hookups, and permits, which require a professional site plan before work can begin.
