As rising home prices continue to keep conventional buyers on the sidelines, Americans could benefit from returning to a well-trodden path to homeownership: manufactured homes.
Manufactured housing now offers one of the most affordable and accessible entry points into the housing market, according to a new Realtor.com report.
House hunters in February could have picked up a mobile home for $141,450, the median list price. This is down 5.7% YOY and significantly more affordable than the median single-family home price of $410,000.
At that price, with a 6% 30-year fixed-rate and 20% down payment, homeownership would only put families back $678 a month.
“Mobile homes offer a unique opportunity to build equity with a significantly lower monthly housing payment. For those who prioritize flexibility and lower cost burdens, the current price dip in the mobile home sector provides a compelling window to move from renting to owning,” said Joel Berner, senior economist at Realtor.com.
With median rents currently running $1,667, a manufactured home could help a large swath of Americans save money and provide an equity safety net for the future.
Popular in the 1990s, the share of factory-built houses declined in the lead-up to the Great Recession as site-built construction exploded in the early 2000s. They now account for about 10% of new housing, while the approximately 7.2 million occupied pre-fabs in the U.S. make up 5.4% of total lived-in homes.
As unaffordability continues to wreak havoc on American wallets, Congress has recognized the importance of manufactured buildings as a source of affordable housing, particularly for rural and lower-income households.
The 21st Century ROAD to Housing Act, passed recently by the Senate, redefines “manufactured homes,” making them easier and less expensive to produce.
President Donald Trump quickly signed an executive order following the act’s passing that directed federal agencies to eliminate or reform energy, water, and alternative-energy requirements for housing, including manufactured homes.
1 thought on “Shrinking Manufactured Home Prices Offer Path To Homeownership – The Mortgage Note”
The author left out the lot rent or purchase. The byer has to have property for his manufactured home. It’s still a relative bargain in today’s market. Planning and Zoning in towns and cities should be careful in placing these units in established neighborhoods due to the stigma attached to manufactured housing.
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