Modular Housing As A Cost-Saving Investment in 2023

Modular Housing As A Cost-Saving Investment in 2023

We all remember the 2007 housing crisis and the collapse of the U.S. housing market when lenders approved mortgages to homebuyers who could not pay them off. It was some time before the U.S. stood on its feet again.

However, now we have a new problem on the horizon—home prices are skyrocketing, and many homeowners are struggling to solve their housing issues.

Investing in your future home is a major step, and it's a financial decision that you really need to think through. Luckily, even in this price jump, there is a reasonable investment route you can take.

Investing in modular homes in 2023 is a life-changing decision. Let's see how opting for modular homes instead of traditional ones can help your budget.

Why Is Housing So Expensive?

If you've been house-hunting for a while, you are familiar with the biggest problem—unbeatable prices. Whether it's apartments, vacation rentals, or single-family homes, the price increase is evident.

If you're looking to take that next step and invest in your future home, these price tags were certainly outside your plan. What is the reason behind this price increase?

There's more than one, that's for sure. The ones we are 100% sure won't stop housing prices from soaring anytime soon. Some of them are:

  • Supply and demand
  • The economic situation
  • Interest rates
  • Land prices
  • Demographic changes

What Is Modular Housing?

If you're familiar with site-built or traditional homes, you’re going to be interested in modular homes. What are these residential properties, and why are they significant?

To put it simply, a modular home is one that's built indoors, meaning that its manufacturing process takes place in a respectable home-building facility.

Once the home is completed, it is then basically shipped to the owner in components and assembled into a unit that will be a residential property.

What makes modular homes special is that they are made in one place, the materials are already calculated in advance, and the construction site does not have to suffer harsh weather that can delay construction.

This type of housing is certainly time-saving, but how do these newer methods affect your budget?

Is Modular Housing a Cost-Effective Solution in 2023?

By all means!

What is the cost of building modular homes in the U.S.?

To your surprise, building modular homes can be 10% to 20% cheaper than using traditional on-site construction. When it all adds up, a modular home's building and assembling process can cost $120,000- $270,000.

The cost of financing this housing option is much more budget-friendly than on-site homes, and this fact alone sparks interest in future investors.

Modular Home Financing – What Are My Financing Options?

Since one of the biggest advantages of this housing option in 2023 is cost-effectiveness, your next question will surely have to be related to the financing method.

Is it possible, and how difficult is it to get funds?

There are actually three ways in which you can finance your modular home in 2023:

  • Getting a conventional construction loan: These types of loans are generally the most popular ones, and lenders are highly likely to approve them because people who will live permanently on that property are more likely to take care of the residence and repay the loan at the appropriate time.
  • USDA, VA, or FHA construction loan: The next option would be government-backed loans. Some of them offer the possibility of a zero-down construction loan.
  • Cash: Of course, the best financing option would be to go all-out and finance your modular home in cash. This financing option automatically eliminates closing costs and all of the paperwork that traditional loans require.

Nevertheless, it's obvious that modular homes will represent a gateway for prospective investors in 2023.

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