Are Mobile Homes a Good Investment in 2021?

Prospective homebuyers are acutely aware that the cost of new construction has become prohibitive. Considering the cost associated with a new, site-built home averages approximately $150 per square foot nationally, paying $300,000 for a 2,000-square-foot home continues to price-out many working families.

That’s just one of the reasons an increasing number of buyers are energizing the manufactured homes industry. Since the end of the recession, manufactured homes have enjoyed sustainable growth as site-built new construction has suffered relative stagnation. While cost tends to be a strong economic driver, the wide-ranging reasons more people are purchasing manufactured homes underscores why the industry is likely to rank among the top growth leaders.

Manufactured Homes Growth Since Recession

Experts generally agree that the “Great Recession” ran from December 2007 to June 2009, and that was among the darkest times for people to realize the American dream of homeownership. But as the country began to pull itself up by its collective bootstraps, inclinations about homeownership were roundly changed.

The recession caused families to understand that expensive site-built homes were riskier than previously thought. Ideas about such homes being long-term and secure investment were undone by widespread bankruptcies and many homeowners finding they were underwater. To this day, plenty of site-built property owners have not fully recovered their previous equity levels.

With the realization that everyday people had zero control over economic disruption, more cost-effective home investment options were sought. Ranked among the most popular solutions were manufactured homes, as the U.S. Census data highlights.

Since 2009, manufactured home shipments in the U.S. have increased from 49,800 to 94,600 in 2019 according to Census data. The sector is on pace to more than double production since the end of the latest recession. While that is certainly cause for investors, manufacturers, and dealers to celebrate, the defining fact that this sector could outpace numerous others in terms of real estate growth resides in the historical numbers. Consider the uptick in manufactured homes purchased following the recovery from the 1980s and 1990 recessions.

  • 1999: 348,100 manufactured home shipments
  • 1998: 373,100 manufactured home shipments
  • 1997: 353,700 manufactured home shipments
  • 1996: 363,300 manufactured home shipments
  • 1995: 339,900 manufactured home shipments
  • 1994: 303,900 manufactured home shipments
  • 1993: 254,300 manufactured home shipments
  • 1992: 210,500 manufactured home shipments
  • 1991: 170,900 manufactured home shipments

In many ways, the 1990s was a period when the country enjoyed robust growth, low unemployment, and enhanced economic security. Although there are always periodic speed bumps that cause disruption, the general prosperity appears similar to 2020. This begs that question whether manufactured homes will surge to previous highs of more than 300,000 in the coming years. Several factors point to the sector outpacing site-built residential construction.

Cost Comparison: Manufactured Homes versus Site-Built Construction

Consumers never want to pay more than the inherent value of any product. Single-family homes are — for all intents and purposes — a product. That may be a difficult concept for everyday people to wrap their heads around because purchasing a home often ranks as the most substantial investment of a lifetime. But by reviewing the substantial disparity between the cost of site-built and manufactured models, it’s evident where the best value resides.

“The median home value in the United States is $245,193. United States home values have gone up 3.8 percent over the past year, and Zillow predicts they will rise 4.1 percent within the next year. The median list price per square foot in the United States is $153. The median price of homes currently listed in the United States is $282,000, while the median price of homes that sold is $244,900. The median rent price in the United States is $1,650,” according to real estate resource Zillow.

Couple that information with the fact the new site-built construction averages approximately $150 per square foot — putting the 2,000-square-foot home at $300,000 — and the reduced price of an equivalent manufactured home delivers far better bang for the buck. By comparison, single-wide manufactured homes remained under $64,000, and larger double-wide models stayed below $120,000 in 2019, according to Homes Direct data.

Recent real estate listings indicate that California manufactured homes also include triple-wide models under $150,000. In terms of consumer value, even the largest manufactured home cost less than half of new site-built structures, and one-third less than older homes. But the typical argument made by the site-built sector is that the two types of residential properties are an apples-to-oranges comparison.

Quality Comparison: Manufactured Homes versus Site-Built Construction

One of the turning points for the manufactured homes was shedding the notion that today’s models are still akin to the sometimes shoddy models of the 1970s. That stigma is patently false because the U.S. Department Housing and Urban Development (HUD) introduced quality standards long ago.

HUD reportedly began requiring the off-site construction sector to meet minimum building standards that brought the industry into compliance with site-built homes in 1976. HUD completely revamped the guidelines in 2000. Manufactured homes now enjoy quality construction equal to or better than their counterparts. In 2019, HUD chief Ben Carson roundly endorsed manufactured homes as a high-quality, cost-effective solution for working families and pointed out this is a growth industry.

“This industry is already having a tremendous impact on serving those communities who are most in need. Today, more than 20 million Americans* live in manufactured housing, which makes up approximately 10 percent of single-family residences. As a result, manufactured housing has become the largest source of unsubsidized affordable homes in the nation – which saves taxpayer dollars,” Carson reportedly said at the 2019 Manufactured Housing Conference in New Orleans. “While lives are helped through new homes, livelihoods are helped through new jobs. More than 40,000 citizens are employed in this sector, from all walks of life. And the Administration is especially impressed by the use of American suppliers in American manufacturing plants. That is how innovation turns into opportunity.”

While both types of homes enjoy quality construction and meet government standards, investment considerations can be complex. At first blush, one might believe that buying a quality product at a lower price would settle any investment questions. But manufactured homes and site-built construction are not necessarily investment similar. Starting with price-point, families that buy one or the other type of home are on vastly different financial paths. By comparing initial price and total payouts over the life of a conventional home loan using a standard mortgage calculator, homebuyers have the definition needed to make an informed decision.

  • Site-Built Cost Calculation: Consider the mortgage math on purchasing a home at the median national sales price of $244,000. The 20-percent down payment means a working family would invest $48,800 upfront. At a 30-year fixed rate of 3.90 percent — if you have good credit — the monthly mortgage payment comes to about $920. Over the course of the home loan, property owners will pay approximately $136,250.68 in interest. The total 30-year investment tallies $331,450.68.
  • Single-Wide Cost Calculation: Given a single-wide manufactured home generally runs around $64,000. The 20-percent down payment runs only $12,800 and estimated monthly premiums are $307.57. Manufactured home buyers are usually restricted to a maximum of 20-years for government-backed loans with lot included. The total 20-year interest runs $22,616.96, with a total payout of $73,816.96.
  • Double-Wide Cost Calculation: Larger double-wide manufactured homes remained under $120,000 during 2019. Using that figure as a baseline, a 20-percent down payment comes to $24,000. Monthly mortgage payments based on 3.90 percent interest over 20 years tally $576.70 with total interest paid at $42,406.81. The overall 20-year cost comes to $138,406.81.

Using these guidelines, the total financial savings of the homebuyer that purchases a single-wide stands at $257,633.72. In terms of double-wide costs savings, manufactured homeowners save $193,043.87. Site-built homes buyers could lower their long-term interest payments by increasing monthly premiums using 20-year loans. In this scenario, site-built buyers would put down $48,800 on a $244,000 property. Pay $1,172.61 each month, incur $86,227.18 in pure interest for a total of $281,427.18.

But first-time homebuyers may also want to consider the monthly payouts as part of a long-term investment strategy. Mortgage payments of $307.57 (single-wide) or $576.70 (double-wide) compared to $920 to $1,172 for site-built options dramatically alters the amount of cash on hand in a family budget. For growing families, additional cash flow helps with dental bills, family vacations, car loans, as well as investing in a 401(k) or college fund. In many cases, young families find themselves working paycheck-to-paycheck to keep pace with high mortgage costs.

Customer Care Separates Manufactured Homes from Site-Built Properties

Manufacturers now include state-of-the-art appliances, amenities, open floor plans, and luxury bathrooms that outpace older homes. We at Homes Direct also provide personalized customer service in the ordering process that allows buyers to select the precise options they desire. This aspect remains either foreign or highly expensive in site-built real estate.

On the West Coast, California manufactured homes have emerged as a single-family solution for rebuilding after years of wildfires and costs that exceed national averages. Nationally, indicators point to the manufactured homes sector returning to the robust real estate growth numbers of the 1990s.

Are Mobile Homes a Good Investment? - Manufactured Homes Trending As Preferred Option!

Emerging data points to a manufactured home industry that is quickly becoming the preferred choice. Rising sales, lower costs, and an ability to enjoy larger homes with equivalent amenities and luxury items favor the manufactured sector. Since agencies such as HUD implemented rigorous quality construction mandates and offered government-backed mortgages, the scales have tilted well to the manufactured preference. But the lynchpin may be the fact that low monthly mortgage premiums and long-term savings make manufactured homes a far superior financial choice for hard-working families.

Ray Gritton

Ray Gritton


Ray Gritton has been in the manufactured housing industry for over 40 years when he started his first dealership in Modesto in the 1970s. Since then he has worked for large corporations in charge of hundreds of dealerships and now owns 13 locations in 5 different states.