What is a Manufactured House?
A manufactured house is a factory-built or factory-made home unit that is moved from a factory and placed on a piece of property. Such houses are assembled in sections in factories. These are then moved to the desired home site by flatbed truck where they are put together according to the home design. Several materials are utilized in the construction of an on-site house such as steel, aluminum, wood, plastic, glass, granite, and electrical wires, which are then used in an assembly line to construct a manufacturing house in the factory. Manufactured housing is inexpensive than traditional homes and therefore it presents a good option for financially-challenged families to buy their homes.
Advantages of Manufactured House over On-Site Constructed House
- The demand for manufactured housing is growing globally, as they are affordable and offers a better-built quality as compared to site-built dwellings.
- Generally, the cost of construction of manufactured houses per square foot is considerably less as compared to the traditional houses that are constructed on-site.
- In terms of construction quality, amenities, style, and public perception, manufactured houses offer almost the same quality as a site-built dwelling.
- In the US, the Department of Veterans Affairs and the Federal Housing Administration offer manufactured-housing loan programs for promoting housing affordability among the targeted demographic.
Market Trends and Developments
- Money spent on the construction industry is increasing around the world. However, developers or manufacturers are looking to cut the cost and time of construction. This has resulted in more production of manufactured houses, as they are built in a factory, require less labor, and the overall construction time needed is far less than conventional ones. These factors are estimated to drive the market in the future.
- The modern manufactured houses are energy-efficient as factories are integrating energy-efficient appliances with manufactured houses. Manufacturers are taking care while constructing manufactured houses, as they require to be tightly constructed with efficient water heaters, cooling and heating systems, and high-performance windows.
- Manufactured houses are considered to be 50% more efficient as compared to on-site houses, and hence growing demand for energy-efficient houses fuels the requirement for manufactured houses.
- In manufactured houses modules or components such as stairs, floors, balcony, and exterior walls are manufactured in batches in a factory. On-site labor needed in the construction of traditional houses are replaced with machinery in manufactured houses, thus decreasing the production cycle time of construction. Moreover, parallel production utilization is better in factory. Thus, the demand for manufactured housing is projected to increase owing to the less time required for construction.
- Manufacturing houses are getting popular in the countries where the population is low and the land rates are low. People in many countries are inclining towards manufactured houses over the traditional ones as it requires less manufacturing cost and easy financing is available for these kinds of homes as compared to traditional houses. The construction cost of manufactured houses is approximately half the price of traditional houses that are built on-site and they still offer the same luxury amenities of traditional homes.
Global Market Scenario for Manufactured Housing Market
According to a detailed report by Growth Market Reports (GMR), the global manufactured housing market was valued at USD 16,854.9 million in 2019 and is projected to reach USD 21,200.7 million by 2027, expanding at a CAGR of 3.3% during the forecast period, 2020-2027.
The market is driven by factors such as availability of better-quality houses, requirement of less construction time, increasing demand for energy-efficient houses, and rising spent on construction activities. However, low perceived resale value, highly competitive market, and lack of awareness are acting as major restraints of this market. Untapped opportunities in emerging countries and increasing investment in research and development are estimated to create opportunities for market in the future. Today’s manufactured houses have amazing interiors and modern residential outlook from outside. People are getting attracted to manufactured housing as they offer features such as a bright modular kitchen, spacious bedroom, a cozy fireplace, walk-in closets, garden tub, plus crown molding, and branded home appliances. This drives the growth of the manufacturing homes in the estimated forecasts period.
COVID-19 Impact on the Market
The coronavirus pandemic has led to havoc across the globe. It had pressurized the manufacturing industry to come at a halt. However, the market is slowly recovering. Manufacturers are including technologies to make the overall system less dependent on humans. Besides this, the industries are seeking for local players to meet their requirements.
The outlook of impact can be divided under the following possible scenarios:
- According to the optimistic scenario, the global manufactured housing market is anticipated to remain under the massive impact of COVID-19 in the first quarter of 2020, and from the second quarter, the demand is expected to rise.
- Under the probabilistic scenario, the market is expected to remain under the strong influence of the crisis until the second quarter, and from the third quarter onwards, the situation will alleviate.
Based on construction types, the manufactured housing market is bifurcated into single section and multi-section. A single section manufactured house is projected to hold a significant share of the market. Single section houses can be spacious or compact as they come with a lot of different configurations, lengths, and widths. This type of home is considered to be perfect for first-time homebuyers, couples, and single individuals. Based on products, the manufactured housing market is segmented into manufactured homes, modular homes, and panelized homes. The modern manufactured homes provide the same luxury amenities, which are found in traditional new homes such as artisanal fixtures, countertops, and granite. This type of home is popular in the countries where the population is low and the land is available for lower price.
In terms of regions, the market has been segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. North America is a promising region for the market. It accounted for two fifth share of the market in 2020. The market in the region is anticipated to expand at a CAGR of 3.4% during the forecast period. Asia Pacific is expected to lead the global market, accounting for a market share of one fifth by the end of the forecast period. The growth of the manufacturing houses market is attributed to rising construction of manufacturing units, especially in developing countries such as China and Korea.
Competitive Landscape and Developments
Prominent players in the market include Nobility Homes, Inc., Cavco Industries Inc., Skyline Champion Corporation, Jacobsen Homes, Excel Homes, American Homestar Corporation, Jacobsen Homes, Excel Homes, CHM Services Inc., Algeco, RED SEA INTERNATIONAL, Scotbilt, The Commodore Corporation, and SEKISUI HOUSE, LTD.
The prominent players in the market are utilizing strategies such as product launches, mergers & acquisitions, and contracts & collaborations. These strategies are expected to deliver effective goods and high-performance goods, supporting market laws, and better client satisfaction.
- In July 2020, Algeco acquired WEXUS GROUP to strengthen its position in the Nordic modular space industry.
- In January 2020, Algeco acquired Altempo SAS to widen its presence in France.
- In November 2019, Skyline Champion Corporation partnered with URBANEER Inc. to develop Accessory Dwelling Units (ADUs), a line of units. The companies provide the ADUs all around the world.
- In 2019, Skyline Champion Corporation, rolled out a manufactured housing facility in Louisiana, the US. The company is planning to increase the plant’s capacity to meet increasing demand for attainable housing.