A modular home can be a smart, affordable option for people in a competitive home market.
Kristine Gill is a former newspaper reporter who spent five years as a spokesperson for a law enforcement agency. She writes about homes and real estate for Better Homes & Gardens.
If you're looking to buy a house, some of the most affordable prices in your area may be for modular homes. But what is a modular home?
Modular homes aren't mobile homes—they don't move—but are often located alongside mobile homes in mobile home parks and similar developments. If you're on the fence about this style of build, learning about the key features will help you decide whether a modular home is right for you.
Bailey Carson, home care expert at Angi
Kristina Morales, Realtor at eXp Realty
Beatrice de Jong, real estate broker and consumer trends expert at Opendoor
What Is a Modular Home, Exactly?
A modular home is a type of prefabricated structure that you can purchase. This means it is built in a factory setting and then transported to your site for assembly on a permanent foundation, similar to traditional homes. Although modular homes often get confused with manufactured homes, modular homes differ, especially in construction codes. Modular homes always comply with local, state, and regional building codes, while manufactured homes adhere to federal HUD regulations.
According to Bailey Carson, home care expert at Angi, "Modular homes are built in sections in a climate-controlled factory and transported to your land, where a builder assembles the home like building blocks on top of a permanent foundation."
Modular homes are not like RVs or mobile homes. Unlike RVs, which are mobile and don't require ownership of the land they sit on, modular homes are stationary and similar to traditional homes in that you own the land that they sit on. This ownership contributes to their value appreciation over time.
You might hear modular homes compared to stick-built homes, but the key difference is that the main construction of modular homes happens off-site, although their assembly takes place on-site.
What Are the Pros and Cons of a Modular Home?
Modular homes offer several advantages to homeowners, including energy efficiency and affordability. According to Bailey Carson of Angi, their construction often results in tighter seams, which reduces heating and cooling costs due to improved insulation. This is because modular homes are built to withstand the transportation process, unlike stick-built homes that endure weather exposure during their construction period.
Additionally, Kristina Morales from eXp Realty highlights that modular homes are typically constructed away from weather elements, unlike traditional homes that can be exposed to rain or moisture while they are being built.
A downside is limited customization of floor plans compared to fully custom-built homes. Most builders offer only a set number of plans; however, interiors can be tailored to your own personal tastes.
Financially, modular homes are attractive due to their cost-effectiveness. Typically ranging from $100 to $200 per square foot, an average modular home costs significantly less than a similarly sized custom-built home.
Although often associated with less expensive materials, Beatrice de Jong from Opendoor notes modular homes are durable and built to last as long as traditional homes.
However, prospective buyers should be aware of zoning restrictions in their area, which may limit modular home options. In regions with extreme weather, like hurricane-prone zones, checking local building codes and recommendations can help determine if a modular home is a practical choice for you.
What Is the Resale Potential of a Modular Home?
Modular homes generally appreciate in value over time, providing a potential return on investment in favorable markets. However, similar to other specialty housing, finding the perfect buyer might require more time.
According to Carson, modular homes are attractive in senior living communities due to their cost-effectiveness and energy efficiency. They allow senior residents to enjoy the privacy of homeownership while offering many different community benefits. Today's market sees growing interest from all ages, especially in areas facing housing shortages and high property prices.
Their affordability also makes modular homes an excellent choice for first-time homebuyers.
Should You Buy a Modular Home?
Modular homes are appealing for first-time buyers due to their affordability and short construction timeframe. While a custom-built home might take six to eight months to complete, a modular home can be ready in about half that time.
If you're concerned about the quality of faster-built homes, Morales recommends thoroughly vetting the builder. It's crucial to check the quality of materials and workmanship, as these can vary significantly.
De Jong advises that potential buyers conduct a home inspection before purchasing, particularly for older modular homes, to ensure everything is in good condition. With due diligence, modular homes can offer comfort similar to any traditional home on the market.
Other Alternative Housing Ideas
Beyond traditional single-family homes, there are several affordable, comfortable alternatives you can choose from.
RV living offers low entry costs and mobility, making it ideal for remote workers, retirees, and digital nomads. These convenient vehicles range from luxury options to simple camping setups.
Tiny homes, which can be either stationary or mobile, are popular for their small footprint and lower living costs. They provide an environmentally friendly lifestyle and can be customized from scratch or adapt vintage trailers.
Accessory Dwelling Units (ADUs), which were once simple guest houses, now offer customizable living spaces. They can house extended family or generate rental income, enhancing property utility.
Frequently Asked Questions
Where is the best place to put a modular home? A modular home can be placed just about anywhere a stick-built home can. If you plan to buy land for a modular home, ensure you can access utilities, water, and other necessities and that a road will allow for the delivery and installation of your home. Check your local county ordinances for any restrictions on modular home building in your area.
How do you buy a modular home? The most important steps for buying a modular home include: deciding on a location; finding a builder who can build what you need; choosing a home model that suits your needs; securing the construction loan financing (if you aren't paying cash); and hiring a general contractor with experience in the modular home business, since most builders don't offer on-site construction of their products.
What is the life expectancy of a modular home? Modular homes can last as long as any traditional built-in home. However, keep in mind many modular homes come with a 50-year warranty. The most important thing to consider is how well they are constructed and the materials used. That's what will determine their longevity.
