Affordable Housing That is Overlooked
December 6, 2016
Many people dream of owning a home one day. As an aspiring home buyer, you’re probably watching the housing market very closely. If so, you know already that the shortage of affordable homes is predicted to worsen over the next ten years. Does that mean it’s time to abandon the dream of owning a home? Absolutely not! Nowadays, federal officials together with leaders in the housing industry and financial experts debate different strategies to combat the affordable housing crisis. Undoubtedly, the pressing need to find a viable solution to the current housing crisis as soon as possible calls for intensified efforts.
Although no one seems to have a coherent plan to end the affordable housing crisis, there might be a solution that very few are discussing: manufactured homes. The professionals in the manufactured housing sector claim that the manufactured homes, which are now produced and shipped at higher rates than before, could be the answer we’re all looking for. There are many advantages of manufactured homes.
Assessing the Factors behind the Housing Affordability Problem
The persistent inventory shortage is just one facet of the affordable housing problem. Another important aspect is the massive increase in house prices registered over the past few years, despite the median household income rising just 13.53 percent to $56,516 since 2009. Based on data from the Census Bureau, home prices have increased on average by 30 percent since 2009, excluding more and more people from the homeownership market. As a result, the number of renters has grown at an exponential rate across the country, driving up rental costs. Given the current context, purchasing or renting a home appears even more out of reach for many Americans. Therefore, thousands of families are “forced” to live in smaller, more expensive homes due to circumstances beyond their control.
But according to affordable housing advocates, manufactured homes are an effective solution to the housing crisis. To begin with, manufactured homes are less expensive in comparison to similar site-built houses. Donna M. Blaze, CEO of the Affordable Housing Alliance, has recently stated that “the manufactured home is (...) the most cost-effective way to provide quality affordable housing.”
Bill Matchneer, former Director of the CFPB and HUD Code Manufactured Housing Program, has also confirmed that manufactured housing can be a viable solution “hiding in plain sight.” Built in factories by highly trained professionals, according to well-established standards and the same “proven systems that keep costs down on cars, smartphones (...) and other produced products,” manufactured homes are usually “about half the cost” of conventional construction.
The proof? While the average sales price of a new single-family manufactured home sold in 2015 was $45,550, the average sales price of a new single-family site-built home was $360,600, according to the Census Bureau. Although the sales price of a manufactured home doesn’t include the land, the huge price difference indicates that buying and installing a manufactured home is significantly less expensive than purchasing a site-built home. But that’s not all. These homes are also built to meet the latest safety, performance and energy efficiency standards, generating significant savings for the homeowner.
Another critical aspect is the size of manufactured homes. Many opponents argue that these homes are smaller than typical site-built construction. While it’s true that you can get a smaller manufactured home, manufacturers make available floor plans in different styles and sizes, including luxury manufactured homes that run into several hundred thousand dollars.
Providing an inexpensive and convenient housing alternative at a time when the housing inventory and homeownership rates have fallen to very low levels, manufactured housing along with the lending solutions specifically developed for this market segment can help remove the roadblocks that stand in the way of homeownership for tens of thousands of Americans. To learn more about how the manufactured home financing programs we offer at Triad Financial Services can help you fulfill your dream of homeownership, please get in touch with us by calling (800)-522-2013.