Thursday, October 8, 2015

Modular Construction's Impact Drops Drastically According to Data Released by the NAHB

I have just read the latest information released by the NAHB on panelized and modular housing in the US. It is very informative about modular housing as well as pointing out what we all know, that different parts of the country are more modular-oriented than others.

Using the data provided by NAHB, there were only 10,560 modular single family home starts in the US in 2014 while the total number of new home starts reached 667,000.

That means that everyone's estimate of modular having a 3% share of the total is wrong. We only had a 1.5% share of the market. We appear to be in worse shape than we had thought. At this rate we will be at less than 1% market share within the next few years.

A lot of you have been sending me this report and saying I will find it interesting. That could not be further from the truth....I find it sad. What could and should be the best way to build new homes in the US is losing ground and we are doing nothing to stop the erosion.

Here is the NAHB report as released. Now read it as if it were a wake up call!

System-Built Single-Family Homes in 2014

Building systems (for example, modular or panelized systems) are an alternative to conventional stick-built construction. According to the manufacturers, building systems offer several advantages. Manufacturing in a controlled factory environment can minimize waste and labor and lead to cost saving. Construction time is generally reduced. The on-going cost of owning system-built homes can also be smaller, as these structures are energy-efficient.
According to the 2014 Survey of Construction data, both the modular and panelized/precut homes newly started in 2014 tend to be geographically concentrated. The total number of newly started single-family modular homes was 10,560 in 2014. More than 80 percent were clustered east of the Mississippi River, with 29% in the South Atlantic division, 22% in the East North Central, 20% in the Middle Atlantic, and 15% in New England (Figure 1). Besides modular homes, there were 10,334 single-family panelized/precut homes started in 2014, with 38% built in the South Atlantic, 25% in the East North Central and 24% in the Middle Atlantic (Figure 2).

Around 3.2% of single-family homes started in 2014 were built using either modular or panelized/precut methods, but market penetration varied across the United States. In the Middle Atlantic, nearly 14% of newly started single family homes were built using one of these two methods, followed by 10% in New England.
The highest adoption rate of modular homes in 2014 was nearly 9% in New England, and then 6% in the Middle Atlantic. For panelized/precut single family homes, the highest market share of newly started homes were in the Middle Atlantic division with around 9%, followed by 4% in East North Central. While a large share of modular and panelized/precut homes were started in the South Atlantic in 2014, that is also where a large share of all starts occur, so market penetration is not particularly high.
For more detail on building system, including the purpose of construction, size and permit value, foundation types, completion time and other physical characteristics, please consult the full study in Housing Economics.

1 comment:

Unknown said...

The reason for this that I see is that Manufactures are charging as much as a stick built prices and it takes the factory longer in states such as California , due to all the third party inspections (Radco) etc...