Friday, January 24, 2014

Calculating the Number of Modular Homes Produced Each Year is Confusing

I was asked recently how many modular homes are sold in the US every year. Well, my friends, the number of new home starts for the modular industry hovers around 3%. If there were 900,000 (yearly adjusted) new home starts in the US in 2013, that would mean that only 27,000 of them were modular or prefab.

That number is easy. The numbers that are hard to find are how many single family homes were built by modular home factories. There are "statistics" businesses out there that try to put a handle on those numbers but since states vary as to how they calculate that number and some states don’t even require factories to register each home, it gets difficult to be very accurate. Then the factories themselves fluff those numbers.

It’s tough to even try and get an accurate count of the number of factories in the US. Many are large with well known addresses while others are small and build in whatever space is available near their buyers. There are production factories that use an assembly line and there are many small factories that build their modules on piles of sticks and timbers called cribbing. Then you have the factories that sell through a builder network and many that sell direct to the new home buyer. Are these factories really modular factories or are they just the way that particular home builder produces homes for his customers?

As far as I can determine, there are currently 119 operating modular home factories in the US. That would make the factory average about 4 1/3 homes a week. But that is not the best number to use. The number of homes that the median factory produces is closer to 2 1/2.  I've found some factories still in operation that are hard pressed to build that many a month.

Is there a point to all this? I sure hope so but for the life of me I can’t figure it out. How is our industry going to raise that 3% number to even 4% if we don’t even have any idea how some factories can turn out 12 homes a week and others produce less than 30 a year?

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