Is It Cheaper to Buy a Manufactured Home?

Manufactured homes offer a distinct pathway to homeownership, differing from modular or traditional site-built homes primarily in their construction process. These residences are built entirely in a factory environment under the strict federal building code administered by the U.S. Department of Housing and Urban Development (HUD), ensuring consistent quality and safety standards. After construction, they are transported to the home site for installation. This article compares the financial aspects of manufactured homes to site-built homes.

Comparing Initial Purchase Prices

The initial purchase price of a manufactured home unit, excluding land and setup costs, presents a cost advantage over a comparable site-built home. Manufactured homes cost less per square foot. In 2024, the average cost per square foot for manufactured housing was around $85, while site-built homes averaged approximately $167.87 per square foot. This difference arises from the efficiency inherent in factory production, where controlled environments minimize waste and allow for bulk purchasing of materials. Reduced labor costs also contribute, as construction is streamlined on an assembly line.

The final price of a manufactured home unit is influenced by its size, such as single-wide, double-wide, or triple-wide configurations, and chosen features. A new single-wide home averages around $86,600, while a double-wide averages about $156,300, and triple-wide homes can start at $200,000. These figures represent the cost of the home unit.

Additional Upfront Expenses

Beyond the base purchase price of the manufactured home unit, several upfront expenses are necessary. Land acquisition is often the first step. Site preparation involves leveling and grading the area for a stable base.

Foundation installation is another cost, with options ranging from pier-and-beam systems costing $1,000 to $2,000, to concrete slabs ranging from $4,000 to $9,000, or even full basements which can cost $12,000 to $25,000. Utility hookups for water, sewer or septic, and electricity are also required, with costs varying from $6,500 to $30,000 depending on the distance to existing lines and the complexity of installation. Transportation and delivery costs to move the home from the factory to the site range from $3,000 to $10,000, but can exceed $25,000 for longer distances or larger homes. Obtaining necessary permits and undergoing inspections are required steps, with associated fees that vary by locality.

Ongoing Costs of Homeownership

Owners face recurring expenses similar to site-built homes, but with distinctions. Property taxes are an ongoing cost, and their assessment vary depending on whether the home is classified as real property or personal property. If the home is permanently affixed to owned land and titled as real property, it is taxed similarly to a traditional house. Conversely, if it is on leased land or not permanently affixed, it may be taxed as personal property.

Insurance costs for manufactured homes can be higher than for comparable site-built homes. Premiums range from $750 to $1,600 annually, influenced by factors such as location, the home’s age, and its foundation type. Utility expenses for water, electricity, and gas are comparable to site-built homes, with monthly bills around $429. Routine maintenance and unexpected repairs should be budgeted for, with a guideline suggesting setting aside 1% to 2% of the home’s purchase price annually. For homes situated in manufactured home communities, lot rent is an additional expense, averaging $500 to $1,200 per month.

Financing and Long-Term Value

Financing options influence the total cost of a manufactured home over its lifespan. The two main types of financing are chattel loans, for the home only, and conventional mortgages, available when the manufactured home is permanently affixed to owned land and titled as real property. Interest rates for chattel loans are higher than those for traditional mortgages, which increases the overall cost of ownership over time. Conversely, homes classified as real property qualify for conventional financing options, including FHA, VA, USDA, or conventional mortgages, at more favorable rates.

The long-term value of a manufactured home impacts its net cost. Manufactured homes were once perceived as depreciating assets. However, modern manufactured homes built to HUD standards appreciate in value at rates comparable to site-built homes. Factors such as location, community conditions, regular maintenance, and market trends play a role in determining whether a manufactured home retains or gains value. A manufactured home that is not permanently affixed to land may depreciate, but those treated as real estate appreciate with the housing market.