Manufactured Homes: A Shrinking Source of Low-Cost Housing
Where has manufactured housing production gone?
Since peaking in 1998 at 374,000 units, manufactured home placements have fallen by nearly 90 percent.
As production of manufactured housing declined, its share of all occupied housing units fell from 7.0 percent in 2000 to 5.9 percent in 2011. Despite manufactured housing’s modest share of the total housing stock, the drop in manufactured home production is notable both because of the severity of decline and because manufactured homes account for an outsized share of low-cost housing, particularly among owner-occupants. Whereas manufactured homes account for 7 percent of all owner-occupied homes, they represent 16 percent of owner-occupied units with monthly housing costs of less than $500. As shown in the Exhibit, the median monthly housing cost for owner-occupied manufactured homes is less than half that of other housing types.
Manufactured housing offers a low-cost alternative to site-built homes for millions of American households. But multiple obstacles could further curtail manufactured home lending and threaten to prolong the depression in manufactured housing production, thereby further diminishing a significant source of low-cost housing.
Read the latest edition of Housing Insights to find out what contributed to this decline and the many obstacles a revival of manufactured housing production faces.
Director, Strategic Planning
Economic & Strategic Research Group
June 27, 2013
The author thanks Peter Scherer and Stephen Wheeler of HAS Capital and Doug Duncan and Orawin Velz of Fannie Mae for valuable comments in the creation of this Housing Insights. Of course, all errors and omissions remain the responsibility of the author.
Opinions, analyses, estimates, forecasts and other views of Fannie Mae's Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.
The views expressed in these articles reflect the personal views of the authors, and do not necessarily reflect the views or policies of any other person, including Fannie Mae or its Conservator. Any figures or estimates included in an article are solely the responsibility of the author.