CHM Blog

America's affordable housing answer rolls off an assembly line

Back in 1970, Quasar advertised its latest TV using the slogan “Works in a drawer.” Pop the little drawer and all the set’s controls were at your fingertips. Brilliant marketing, and a shift toward sleek and space age took place.

Recently, the queen of homemaking, Martha Stewart, began selling prefab homes and now another shift is occuring—in a big way. Your next house (or your first one) just may arrive on a truck. Realtor.com’s Allaire Conte reports that as home prices continue their relentless climb, everyone from federal lawmakers to community nonprofits is suddenly eyeing off-site construction as the answer to America's housing shortage. “These are homes built in climate-controlled factories, then trucked to your lot and assembled in days, not months,” she says. The idea? More housing, faster, and cheaper.

Back in Washington, the bipartisan ROAD to Housing Act of 2025 is pushing HUD to update how manufactured housing is legally defined as well as study how these factory-built homes are financed. Supporters see it as one of the fastest paths to adding affordable inventory. But some homebuilders are warning that blurred definitions and lingering stigma could backfire on buyers who don't understand what they're actually purchasing. So here is where it gets technical; not all factory-built homes are created equal.

Manufactured homes (what many people mistakenly call mobile homes or trailers)—are built to federal HUD code and have a permanent steel chassis underneath. One manufacturer describes them as basically having a frame with axles that you haul into place. The average manufactured home costs just $124,300, according to the Manufactured Housing Institute, compared to more than $450,000 for a new stick-built home. On to modular homes. By contrast, these are built to the same International Residential Code as any newly constructed house. Once they're craned into place and bolted together, it’s hard to tell the difference between modular and a conventional home. So instead of calling it modular, it's just a home built using modular construction.

These manufactured home producers vehemently push back on any suggestion their homes are inferior. Au contraire. They scream brand-name appliances, fixtures, and materials—all assembled in a controlled environment where nothing sits in the rain for weeks like traditional job sites. The factory process takes just two weeks to go from raw materials to a nearly completed home structure.

But those in the trades should take note that even AI can’t take actual human labor out of the equation. Cross-mod homes blend 70% factory construction with 30% site-built features like porches and garages, qualifying for traditional 30-year mortgages and giving buyers instant equity. Diabolical marketing genius? Perhaps a godsend to those who think they may never own their own home.

Now here is the best news: The FHA stats analyzed by the Urban Institute shows that manufactured homes on owned land appreciated 211.8% between 2000 and mid-2024, nearly matching site-built homes at 212.6%. Both averaged roughly 5% annually. Since 2014, manufactured homes have often outpaced conventional homes in year-over-year gains.

So let’s take a few steps back and punt. This isn't about affordable housing anymore—it's about attainable housing. And that distinction might be what finally shakes off the old stigma.

Realtor, TBWS

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Neutral

Mortgage rates are getting some pressure today. The MBS market worsened by -22 bps last week. This may have been enough to increase mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Neutral

These are the three things that have the greatest ability to impact rates this week. 1) Jobs, 2) Retail Sales, 3) Inflation.

1) Jobs: We will get Big Jobs Friday, but on a Tuesday! We will get Non Farm Payrolls, Average Hourly Earnings, Unemployment Rate, Labor Force Participation rate and more.

2) Retail Sales: This is older-delayed October data but it is very important.

3) Inflation: We will get CPI and Core CPI on Thursday. We also get the Atlanta Fed Business Inflation Expectations and the UofM Consumer Sentiment Inflation Expectations this week.

This Week's Potential Volatility: High

This morning markets saw some rocky trading that has left us under some pressure. Volatility has started at moderate to high levels and will likely be high this week.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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