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Buying a manufactured home can provide great value to homeowners

Why Does Buying Manufactured Homes Give You Such Great Value?

How Good is the Deal?

Considering buying a manufactured home? If so, you’re making a great decision. Manufactured homes offer the most value per square foot of any home on the market. They’re energy-efficient, well built, and available across the country. Whether you’re in the mountains of California or the plains of Kansas, a manufactured home retailer near you can help you find your new home.

Not convinced yet? Let’s dive a little deeper into just how great of a deal you’ll get when you purchase a manufactured home. 

As of writing, the average cost per square foot for a new site-built home is right around $150 per square foot. Some places, like rural Alabama, are lower, while other areas, like San Francisco, are much, much higher. Using that $150 per square foot price, a new site-built home with 2000 square feet will cost about $300,000. That probably seems high, but let’s quantify how high the financing costs are. Assuming an average interest rate of 4%, 20% down, and a 30-year term, the monthly payment would be $ 1,145, or roughly $1500 after added taxes and insurance. To afford this, the homeowner would need to make $6000 per month or $72,000 per year.

Now let’s look at a similar manufactured home. The median price per square for a manufactured home is $100, so a $2000 sq. ft. home would cost approximately $200,000. Using the same financing terms above, the monthly payment would be $750, or $1100 after taxes and insurance are escrowed. The homeowner would need to make $4,400 per month or $52,800 per year to afford this payment.

Look at the two-income differences – that’s over $20,000 per year! For the same size, same build home. Buying manufactured homes is simply more affordable. And don’t mistake affordability for poor quality. Manufactured homes are a better value because of where they’re built and how they’re built, not the build quality. Read on to learn why these homes are at such a better price than their competitors.

Factory Construction

Manufactured homes are built in factories, hence the name ‘manufactured.’ This may seem strange if you’re thinking of how other homes are built, but not if you look at other expensive items you purchase. Cars, boats, RVs, tractors, planes, HVACs, cranes, and other expensive, complex items are all factory-built. In fact, homes are very likely the ONLY expensive item someone purchases that is NOT built in a factory. 

Imagine if you purchased a car, and the dealer then showed up at your house with all the parts, laid them in the yard, and drove off? Only to have someone else come in the next week or so and assemble the car in your driveway? That wouldn’t make any sense at all. Why would you want all those expensive parts and complex engine components sitting out in the weather? The same applies to housing. When you build a site-built home, all the components sit out in the weather until the builder finishes the house, which can damage the materials. Building the home in the factory allows the manufacturer to keep all the components inside, which means no damage. This also keeps costs down for those buying a manufactured home. The factory environment also means no weather delays, keeping costs down. Items built in a factory are always a better price and higher value, and manufactured housing is no different.

Economy of Scale

Builders also use the principles of economy of scale to keep the price of manufactured homes at a more affordable level. “Economies of scale” refer to the costs saved due to production becoming efficient at a larger scale. When a company constantly produces the same product, they are able to spread their costs over all of their goods. This is why anything made special to order is more expensive – and why manufactured homes are more affordable than those built custom on-site. 

What does this mean for homebuyers? It means that because manufactured home factories purchase supplies in bulk, they get lower prices. And because they get lower pricing, they’re able to pass those savings on to the consumer, the homebuyer. A manufactured home with the same materials will be a lower price.

Make no mistake; manufactured home factories can build A LOT of homes. During the busy seasons, a factory will build several homes per day. That means they’re turning out over one thousand homes per year! This high production volume allows them to get great pricing on items such as windows, doors, appliances, lumber, carpet, drywall, etc. The homeowner then gets to enjoy these savings. Same product, but a better price because the manufactured home builder is buying so many at once.

Wind Zones

If you live in the coastal United States, you’re probably familiar with hurricanes and tropical storms. These storms form in the tropics and travel across the Atlantic towards North America. When they reach land, they will slam into the coast with rain and wind, damaging homes, businesses, and roads. They can sometimes have wind speeds up to 150 miles per hour! Homes in coastal areas need to be able to withstand significant wind. To help classify the ability of homes to withstand strong wind, HUD created the Wind Zone rating. 

This rating essentially classifies any areas as belonging to Wind Zone I, II, or III. These Wind Zones represent the fastest winds expected in those areas, and any manufactured home built for that zone needs to be able to stand up to that wind speed. (If you were curious, Wind Zone I is 70-mph, Wind Zone II is 100-mph, and Wind Zone III is 110-mph).

We mention these codes because site-built homes do not have these standards, and many older site-built homes cannot withstand the storms that may impact the region they’re in. This adds to a manufactured home’s value because even at a lower price, the manufactured home will be more resilient against damage from storms. Getting a more durable product at a lower price is always a better deal.

Regulations and Codes

To finish, we need to discuss the HUD code in more specifics because it is the standard by which all manufactured home builders must build. Because it is a federal code, HUD overrides all local building codes. 

Even if local codes are different, HUD codes come first and get priority. 

One of the key differences is that HUS requires that all manufactured homes have a steel chassis. It also regulates wind zone rating (see above), roof load rating (for snow), and thermal zone ratings (for HVAC efficiency). 

Knowing that there is a national standard allows those buying manufactured homes to feel more confident that their home is built for the region in which they live. If the homeowner gets a lot of snow in their area, the home’s roof can handle it. If there’s a lot of wind, the home can withstand it. And if it’s particularly hot or cold, the home will be well insulated to keep the homeowners comfortable and the energy bills low.

Manufactured homes are factory-built to a rigorous code, so homeowners know they’re getting a quality product at a great price. That is why manufactured homes are an excellent value for all homeowners nationwide. If you’re interested in getting manufactured home insurance, make sure to contact us right away!

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Next story

Wages rose steadily as the pandemic quieted down and business resumed. However, there were a number of issues that contributed to a further decline in the average citizen's budget. As a result, young people and new homeowners will face long-term affordability and availability challenges. Read our blog to learn more about America's affordable housing crisis and the impacts that it poses. 
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