In 2023, the prefab homes market had steady growth, reaching $47.17 billion. This suggests that the demand for prefab homes is increasing. Prefab homes are made in sections or modules and then sent for assembly on-site.
Consequently, there’s been a 7% increase in prefab home shipments. However, despite a 3.7% decline in CAGR, the prefab home industry has still made $9.1 billion in revenue. This means it is a good time to invest in such properties.
If you want to purchase a prefab home, opt for services like Houzeo. The platform offers you a convenient way to find these properties.
What Is a Prefab Home?
Prefab or prefabricated homes are factory-built houses. They are pre-built or manufactured on order. The house owner can get it delivered or assembled at the location. Compared to a regular home, they are simple to construct and relocate.
In stick-built homes, you can choose the design, floor plan, and other features. You have the same amount of customization available for prefab homes. However, its foundation depends on the type of prefab home you choose.
Types of Prefab Houses
Prefab homes are available in various shapes and designs. The key difference between them is some homes are assembled in factories, while others are put together on-site. Here are the types of prefab houses:
Modular Homes
Factory-built modules are put together to construct these homes. These modules are 90% pre-ready and assembled on-site. Moreover, modular homes are highly customizable.
Additionally, modular homes have a unique quality. Since they are constructed on a permanent foundation, they closely resemble stick-built homes.
Manufactured Homes
A manufactured home is 100% factory-built and later transported to the site. You have the option of building them on a chassis. However, getting a mortgage is not easy, as the lender asks for a permanent foundation.
The U.S. Department of Housing and Urban Development (HUD) has set strict building codes for manufactured homes. These codes ensure homes are safe to stay in any weather condition and are of high quality.
Kit Homes
Kit homes or ready-cut homes are built in sections, like modular homes. They are easy to assemble, and homeowners prefer to build them alone. Log cabins and tiny houses are the most popular types.
Pros and Cons of Prefab Homes
Here are the pros and cons of prefab homes:
✅ Pros
- Safety: Prefab homes are built under state laws and HUD regulations to make them more secure and durable.
- Quick Construction: Since these homes are built in parts, they are factory-ready. Thus, its construction takes considerably less time than traditional homes.
- Affordability: Minimal construction is involved in the process, which significantly drives down labor and other construction costs.
❌ Cons
- Land Costs: To build a prefab home, you’ll need to own the land. If you take land on lease, it could cost you more than a site-built home.
- Upfront Payments: To build a prefab home, you will need to pay construction costs upfront, even if you opt for a construction loan. There is the possibility that mortgage installment may commence during this process.
- Zoning Laws: You have to adhere to the building codes and zoning laws during the construction of prefab homes. If any customization doesn’t meet the zoning requirements, you might be unable to continue the construction.
Find Homes For Sale by Home Type and Style
The market offers a wider range of homes than ever before. But don’t get overwhelmed! Knowing your preferred style can help you narrow your search. Here are some options to target your search by home style:
Financing Options for Prefab Home
It is tough to get a mortgage for a prefab home. There is the possibility of getting it with a good credit score and a low DTI ratio. However, there are certain options you can avail of.
- Chattel Loans: These loans are for moveable properties, like boats and cars. But manufactured homes also qualify under this mortgage.
- Traditional Loans: In this case, you have to provide a minimum down payment of 20%.
- FHA Loans: You can easily get an FHA loan, but you need to adhere to the requirements.
- VA Loans: If you have a military background, you can opt for VA loans.
Should I Buy a Prefab Home?
If you own land, buying a prefab home is a great option. Prefab homes are highly energy-efficient and are an affordable alternative to traditional homes. Financing them could be more efficient if you have a good credit score and a low DTI ratio.
However, finding a home can be a time-consuming task, and Houzeo can help you with that. Houzeo’s platform hosts a wide range of properties.
» Houzeo Reviews: Here’s why 7000+ home sellers have rated Houzeo 4.9 stars out of 5 on Google and Trustpilot.
Find Your New Home With Houzeo
With thousands of property listings, Houzeo.com is one of the biggest property listing sites in the US. Find prefab homes, condos, townhouses, co-ops, and other types of homes for sale on Houzeo.
Frequently Asked Questions
How much cheaper is prefab?
Modular prefab homes are 14% cheaper than traditional homes. This is due to the use of standardized materials and construction methods. If you want to learn more about other types of prefab homes, click here.
Is prefab the same as manufactured?
Manufactured homes are a type of prefab home. They are built and ready to be installed on site.
What is the average price of a prefab home?
The average cost of a prefab home is between $80 and $160 per square foot. For example, a 1,600 sq. ft. home would cost around $128,000–$192,000.
