Tiny Tuesday: Manufactured vs. Modular

Mobile homes, despite the name, aren’t all that mobile. Though it’s built on a chassis for transport, a mobile home (also known as a manufactured home, which sounds more neutral) almost always has its wheels removed upon arrival at its final destination. The house is jacked up, then set down on piers on a slab or deep foundation. Since the chassis is not designed to bear directly on a base, there’s usually a crawlspace underneath.

A modular home is even less mobile. It’s built in one or more flat-bottomed pieces which are transported by flatbed truck. Once on site the modules are removed from the truck and anchored directly to a slab or deep foundation. Unlike a manufactured home, a modular home has no chassis, and can be placed directly on a base with no airspace between the ground and the underside.

ManufModular

Manufactured homes cost $35,000 to $55,000 new. Trailer parks make manufactured homes even more affordable – residents typically own their homes but rent the land. Unlike other real estate, manufactured homes tend to depreciate quickly, and this characteristic is a major driver of wealth inequality. Fortunately, homes built more recently hold their value better.

The reason for this is quality. Originally, there was no authority to regulate manufactured home construction in the US. Since the 1980s, HUD has managed codes for manufactured housing specifying everything from materials (no asbestos!) to foundations (making the homes less susceptible to frost and flood damage) to waterproofing (reducing maintenance costs).

Modular homes can be any size, but single modules that resemble manufactured homes (like the ones built by Vermod) start at $100,000. Since they’re not designed to be moved more than once, they are governed by the International Residential Code (IRC), and they appreciate over time consistent with conventional housing. A modular home typically has better insulation and air-sealing than a manufactured home (in part because there’s no airspace underneath), which reduces fuel costs and makes the annualized price competitive with a manufactured home.

But a lack of financing options means a modular home buyer needs to pay much more money up front than a manufactured home buyer. That makes modular housing a nonstarter for many people. Vermod is working with lenders to offer financing that can bring the cost of a modular home within reach.

All this and more was explored in a recent episode of Vermont Edition, which you can listen to here.

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