Pros and Cons of Buying a Modular Home - SoFi

Modular homes are increasingly capturing interest as a fast and affordable housing option. The global market for modular homes is forecast to grow from $82.30 billion in to $139.03 billion in . These houses are built from factory-made components and are then constructed on a permanent foundation on a building site. They must meet the Department of Housing and Urban Development standards, as well as local guidelines.

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Not to be confused with manufactured homes (previously called mobile homes), which can be moved from location to location, a modular home can be a good alternative to what are known as stick-built or traditionally constructed homes.

Could one be right for you? Here are the pros and cons of these structures, to help you decide if this might be your next home sweet home.

Key Points

•   Modular homes have limitations in terms of customization and design flexibility compared to traditional homes.

•   Financing options for modular homes may be more limited and interest rates may be higher.

•   The resale value of modular homes may be lower than that of traditional homes.

•   Zoning and building code restrictions may limit where modular homes can be placed.

•   Some people may perceive modular homes as having lower quality or being less durable than traditional homes.

What Are Modular Homes?

A modular home is constructed in a way that differs from a traditionally built home. Many of the components are made in a factory and then shipped to the property, where they are assembled on a permanent foundation.

The process is typically less expensive and faster than a stick-built home (meaning one that is assembled piece by piece at the site).

As briefly noted above, modular homes are permanent structures and are subject to local and federal standards.

Recommended: Mobile vs. Modular vs. Manufactured Homes

How Are Modular Homes Constructed?

One of the biggest differences from a traditional homes is the way modular homes are constructed. The house’s components are assembled in a factory and delivered to the homesite in one or more trips. The modules may be akin to three-dimensional boxes that are connected to one another and the foundation at the job site.

The benefit of constructing modular home components in a factory is the controlled environment. Because the parts are assembled under ideal conditions (perfect temperature, humidity, etc.), buyers can usually expect a consistent, high-quality build.

In addition, the actual build can move more quickly. Estimates of the time to build a modular home range from 16 to 31 weeks, depending on how customized the plans are and other variables.