Home inventory of has fallen near record lows across the country, but more consumers are in need of a place to live. Some economists say manufactured homes—also known as mobile homes or trailers—may be the answer to relieve housing shortages in some markets starved for greater affordable housing.
About 5.6 percent of Americans—or 17.7 million—live in manufactured homes. These types of homes provide shelter for one in 10 households who live below the poverty line, according to a new report released by Apartment List, a real estate listing service.
Sydney Bennet, author of the report and a senior research associate at Apartment List, believes the number of people living in manufactured housing could grow significantly as the need for affordable housing grows more dire.
In the nation’s 100 largest metros, residents living in manufactured homes—either renting or owning—spend an average of 40 percent less on housing than those living in more traditional “stick-built” homes. The average monthly gross housing cost for a mobile home is $564, compared with $1,057 for a traditionally built home or apartment, according to the report by Apartment List. (The gross housing cost includes rent or mortgage payments and property taxes, lot rent for mobile homes, and utility costs.)
Seniors on fixed incomes may find the option more appealing. Upscale mobile home parks are popping up that are aimed at attracting the 55-plus crowd, offering spacious “double-wide” trailers, community centers, and pools, among other amenities.
But buying a mobile home is different than purchasing a stick-built home. Mobile homes are sold separate from the land in the trailer park. Also, mobile homes are classified as either a real estate property or personal property. Buyers can finance a purchase through a traditional mortgage if the property is classified as real estate. However, the majority of manufactured loans are financed as personal property with a chattel loan, which usually come with high rates and shorter loan terms.
Mortgage financing giants Fannie Mae and Freddie Mac are viewing manufactured housing as a potential solution to ease shortages of affordable homes. The government-sponsored enterprises announced plans in January to purchase more manufactured housing loans over the next three years.
Source:
“Are Manufactured Homes a Solution to the Housing Affordability Crisis?” Apartment List (June 15, 2018)
