Manufactured Homes Expected To Ramp Up Production Dramatically This Year

Manufactured housing production is expected to grow rapidly in the first half of 2022, after already seeing sharp growth over the past two years, according to a new survey of producers.

Rising rents, home prices and interest rates are fueling optimism that 2022 will be the year the industry levels the playing field with conventional builders, per the latest Texas Manufactured Housing Survey. That sentiment is prompting what the Texas Real Estate Research Center at Texas A&M University called "a flood of capital expenditures and operational expansions."

The Texas Manufactured Housing Association reports its capital expenditures index, a measure of how swiftly the industry is growing, has increased every month since the survey began in June 2020.

Though the cost of all housing has increased for consumers, TMHA Vice President of Operations Rob Ripperda attributed the boom to the relative affordability of manufactured homes. According to August 2021 data, the average sale price of a multi-section home in the South was $139K, up 27.4% year-over-year, or 21% adjusted for inflation.

Like other industries involving construction, manufactured housing is seeing supply chain delays, with delivery times estimated at 40 weeks, according to a January Texas Real Estate Research Center release. But new capital investments, which have increased for 19 straight months, mean manufacturers are hiring more and adding additional plants, or expanding on existing ones, the center stated.

“Manufactured housing is centered on driving as much efficiency into the home-building process as possible,” Ripperda said in a release. “That means homes from plants get built with less labor and less materials wasted. Given widespread inflationary pressures, manufacturers are bullish that their value proposition will only look better as site-built producers get hit harder by rising costs and interest rates.”

Almost 1,500 manufactured houses were shipped in December 2021, per the latest data available from the TMHA. December also saw the first time single-section home shipments outpaced multi-sections since November 2019. Single-section homes are more commonly referred to as single-wide. The number of units shipped was fewer than November 2021, but 11% more than in December 2020.

“Manufacturers are working hard to make improvements to enhance efficiency in their plants,” said Harold Hunt, a research economist with the Texas Real Estate Research Center. “Creativity is the key, and each manufacturer may not attack the problem in the same way. But the end goal is to crank out more units within their capacity constraints.”