Prices of Modular Vs. Stick Built Homes

The modular home industry is undergoing a transformation. Once thought to offer low-quality, unattractive homes, technology is making it possible to produce high-quality, factory-built modular homes that are cheaper than their traditional counterparts. Modular homes are not manufactured homes, which is another name for mobile homes. Modular homes are required to meet the same standards that on-site builders must meet.

Builders in Sweden, Germany and other European countries are using what is known as off-site fabrication, which is basically a homebuilding factory, to build their highest-quality homes. It is in this indoor, controlled environment that builders can combine the latest technology with manufacturing efficiency and utilize trained, skilled workers to build high-quality homes in less time at a competitive cost.

Weather and materials shortages are less likely to be a problem for a factory-built home. In-house inspectors help make sure the quality is good. Energy efficiency is usually very good in modular homes, and the assembly line process further helps increase the quality of the home, especially in the area of energy efficiency.

Typically, a modular home costs 10 to 20 percent less than a stick-built home, which is so called because it’s built out of sticks or lumber. A conventional stick-built, non-luxury home costs about $150 to $250 per square foot. A modular home can range from $50 per square foot up to $250 for some luxury houses.

The price of a modular home depends heavily on location and size. It helps to live near a factory where these homes are built. The cost of transport can vary, especially if you are more than 500 miles from the factory.

Financing can be a bit quirky. Most modular builders want you to make a series of payments as the building progresses. You will need to have your finances in order to convert a construction loan to a mortgage once the home is completed.

You will need to own a lot on which a modular home can be placed. You will also need to find a plumber, electrician and any other tradespeople required by your locality to do finish work and utility connections. Check the zoning in your locality. Some zoning regulations do restrict or prohibit modular homes.

Modular homes may not have the variety that stick-built homes offer. Still, modular homes do offer many options, but typically they are not custom built. Some modular builders will customize home choices, and some will build your design from scratch. Some homebuilding experts say modular home designs are now competitive with their stick-built counterparts.

A modular home has pre-cast and pre-cut parts made in a climate-controlled factory that are assembled after delivery. The parts are brought to the site, where the building crew puts the house together. This can often be done in less than two months.

A stick-built house requires more builders to be on site than a modular home does. It is also exposed to weather elements longer than a modular home, because it takes longer to erect and is built in the outdoors. That can cause more wear and tear on the house and cause it to deteriorate more quickly.

A modular home may not hold its value the way a stick-built home does. Part of that is because of the negative stigma attached to modular homes. As modular homes become more common, however, this may change.

Modular homes are most popular in the Northeast, where labor costs are highest. However, the percentage of total homes built is still in the single digits, and experts do attribute this to stigma.