Meet the new mobile home: Manufactured houses deliver the American dream amid tough housing market

·9 min read

Chesney Cross, and her husband, Ken, began hunting for a new home in the Knoxville, Tennessee-area just as the pandemic began upending the housing market.

After a year of searching, the couple were unable to find anything that fit their $250,000 budget.

“Everything was selling super quickly and above what we wanted to spend,” says Chesney, 33. “We couldn't find anything that wasn't a giant fixer-upper.”

The couple had been living in a 1,100-square-foot home for a decade. But when their first child, Cash, arrived in November 2019, it began to feel cramped.

As frustrating as the house-hunting process had become, Cross would still spend hours scouring Instagram for her dream home: #Farmhousestyle.

That’s when she came across a picture of a house with the rustic, farmhouse-chic aesthetic she pined for.

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The "Southern Charm" model by Clayton Homes.
The "Southern Charm" model by Clayton Homes.

The price was right, but it turned out to be a manufactured home, an offspring of the mobile home.

"I mentioned it to my husband, and of course, he had that mindset of like, 'It's a trailer, you know,'” she says, alluding to a common perception of the old, cheaply built mobile homes. “I was like, 'No, you have to see these photos. It looks beautiful.'”

No matter, the family moved in last year, three months after signing a contract.

Chesney Cross, with her son Cash, outside their new manufactured home in Sevierville, Tennessee.
Chesney Cross, with her son Cash, outside their new manufactured home in Sevierville, Tennessee.

Priced out of the housing market

As an overheated housing market – marked by double-digit price increases, bidding wars and inventory shortages – puts the dream of homeownership out of reach of many ordinary Americans, manufactured homes are growing in popularity because their cost is roughly half that of homes built on a permanent site.

Unlike a traditional site-built house, which is constructed at its final location using multiple teams of subcontractors, a manufactured home is built in an indoor facility and delivered to its location. That lowers costs by improving the efficiency in the home-building process: All the teams needed to build the manufactured home are in the facility, dramatically reducing labor costs.

More than 43,000 land-lease/mobile park communities exist in the U.S., with an estimated 4.3 million home sites, according to the Manufactured Housing Institute, a national trade organization. And nearly 22 million people live in manufactured homes.

Or Michaelo, founder of Orbit Homes, which makes manufactured homes in California, says the simplicity of completing a house in the factory is what drew him to the business.

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A manufactured home by Orbit Homes
A manufactured home by Orbit Homes

"It's cutting the time of construction, the hassle of dealing with all the trades – and the cost is tremendously lower," he says.

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Cheaper cost of manufactured homes

The price per square foot for a manufactured home in 2021 was about $57, compared with $119 for a home built in a neighborhood (excluding land), according to the MHI.

For the first time in 15 years, manufactured homes are on track to deliver more than 100,000 units this year, a 23% increase over 2016, according to the organization.

Today, manufactured homes refer to homes built on or after June 15, 1976, with construction standards regulated by the Department of Housing and Urban Development. The term “mobile” or “trailer” homes are typically used to describe bare-bones manufactured homes built before 1976.

A neighborhood in Knoxville, TN where site-built, manufactured homes were placed and built by a developer.
A neighborhood in Knoxville, TN where site-built, manufactured homes were placed and built by a developer.

The quality and durability of manufactured homes have improved in recent decades to conform to federal and state construction requirements. This has made manufactured homes an affordable and attractive form of housing for many, on either individual lots or in parks, say industry experts.

“There's a lot of demand for our homes right now," says MHI CEO Lesli Gooch. "And that's because people are looking for that extra space. They're looking to own their own four walls, have outdoor space, enough space for a home office. Today’s manufactured homes are built to a federal building code, are structurally secure and resilient, energy-efficient and include a range of modern features that today’s consumers want."

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Mobile home values rise

Not just that, over a five-year period ending in 2019, the median value of manufactured mobile homes rose at a faster clip in 27 states than the median value of single-family homes, a new study from LendingTree shows.

Chesney Cross moved into this new manufactured home in Sevierville, Tennessee, last year.
Chesney Cross moved into this new manufactured home in Sevierville, Tennessee, last year.

That value increased by nearly 40% on average from 2014 to 2019 (the latest census data available), while the median value of single-family homes over that same period increased by 33%, the report says.

As a result, the nationwide median value of a mobile home (as in a moveable dwelling both pre-and post-1976) in 2019 was $53,300. While that is still nearly $190,000 less than the median value of a single-family home, the value of mobile homes has been climbing quickly, according to Lending Tree.

A manufactured home by Orbit Homes
A manufactured home by Orbit Homes

That is not surprising, says Glen Esterson, a broker for mobile park communities and a former mobile park owner, who has seen skyrocketing interest from investors further accelerate during the pandemic.

“In 2020, my team sold 40 mobile park communities. In 2021, we sold 77,” he says. "We're the most affordable solution for low-income housing.”

Solving the affordable housing crisis requires many pieces, including increasing housing supply through new home construction, addressing zoning regulations that constrain the provision of higher-density and affordable housing. But manufactured housing is an important component, says Gay Cororaton, senior economist and director of housing and commercial research for the National Association of Realtors.

A manufactured home between 1,000- 2,200 square feet costs $138,000, on average, roughly 40% of the median sales price of an existing home at $362,600 and one-third of the cost of a new single-family house, at $416,900, she says.

Home financing remains a challenge

A major challenge for purchasing a manufactured home is financing and the regulation that the manufactured home sits on land that the homeowner also owns, Cororaton says. For owners of manufactured homes who do not possess the land, mortgage rates tend to be higher as they are considered a riskier investment.

Those drawbacks – along with trailer park or land access fees – may discourage some buyers.

The average sale price of a manufactured house as of August stood at $112,000, while the average sales price of a new site-built house with land totaled $481,700. For homeowners who don't own the land, the average monthly rent for manufactured homes in the U.S. was $568.

Manufactured homes are the most expensive in Washington, Oregon, and California, mirroring traditional housing market conditions in those states. Washington is the only state where the median value of a mobile home is higher than $100,000. Oregon and California trail, with median values at $93,500 and $91,400, respectively.

Meanwhile, mobile homes are the least expensive in Nebraska, Iowa, and Ohio. All three states have a median value of less than $25,000.

Jacob Channel, an economist with LendingTree, says his company's report shows that mobile homes can be a good investment.

'Trailer park stigma'

“People are afraid to buy mobile homes for a variety of reasons. And one of them is that they're afraid that they won't see any return on investment," he says, adding that he believes the report dispels that idea. “If you're thinking about buying a mobile home, as long as you buy it in a decent location, in a decent trailer park, for example, and you buy a home that's in a good quality condition, then you can expect to see a return on your investment.”

A kitchen in a manufactured home by Orbit Homes
A kitchen in a manufactured home by Orbit Homes

That was the case with Mark Robinson, 48, who was born and raised in the Paradise Cove mobile park community in Malibu, California.

In 2001, he bought his first mobile home for $65,000 in the Seminole Springs Mobile Home Park in Agoura Hills, just outside Malibu. After joining the Los Angeles County Fire Department as a firefighter, Robinson says he quickly paid off the home. He had a $356 association fee that covered water, sewer, and trash.

Mark Robinson with his wife Veronica and daughter Brooke
Mark Robinson with his wife Veronica and daughter Brooke

“I loved the trailer park stigma I got from my co-workers as I watched them struggle to make payments on their stick-built, overpriced homes,” he says, referring to their traditional homes that were built on-site.

In 2007, he sold his trailer for $285,000 and pursued his own site-built dream house.

A few years in, Robinson says he missed the beach life and decided to move back into a mobile home on the beach.

"We were only 15 minutes away, but there's a difference about being able to wake up and, you know, have a cup of coffee and sit on your deck and be checking the surf at Zuma Beach," he says.

In 2014, he bought a manufactured home in the Point Dume Club community for $375,000 with the land rights.

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Solar roof, fully wired

In three years, the property had more than doubled in value, and he was able to sell it for $810,000. This time, he bought another home in the same park for $850,000 with ocean views, plus a $1,630 monthly space rent.

"We are getting a $20 million view for $850,000," Robinson says.

Mark Robinson's current manufactured home in Malibu's  Point Dume Club community
Mark Robinson's current manufactured home in Malibu's Point Dume Club community

He is in the process of upgrading to a new manufactured home, which is estimated to cost around $500,000.

From Robinson's perspective, it's also a great investment, with a solar-paneled roof and a fully-wired house.

"Our forever trailer park home should appraise over $2 million once we put our new home,' Robinson says.

After Chesney Cross picked out the "Southern Charm" model from Clayton Homes, the largest builder of manufactured homes in the U.S., she added some upgrades, including a pitched roof.

Cash, 3, stands in front of a standalone tub in his new home.
Cash, 3, stands in front of a standalone tub in his new home.

The total cost reached about $180,000. A 2-acre parcel in the area they were considering would have cost them $70,000, bringing their total to $250,000, well within the range of their initial budget. The couple instead decided to locate the home on their family property in Sevierville, Tennessee, to save on the price of the land

A site-built house would have cost them $350,000, she says.

Chesney Cross, her husband, Ken and their child Cash in their new kitchen.
Chesney Cross, her husband, Ken and their child Cash in their new kitchen.

Cross, who lost her job in marketing during the pandemic, says she’s glad they didn't take on a huge loan for a traditional home.

“We definitely have the space that we needed and have all of the modern touches we wanted,” Cross says. “And of course, the price point was far better than what we were seeing in the market.”

Swapna Venugopal Ramaswamy is the housing and economy reporter for USA TODAY. Follow her on Twitter @SwapnaVenugopal

This article originally appeared on USA TODAY: Mobile homes' new look: Manufactured homes answer housing market woes

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