Manufacturerd Homes

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Manufacturerd Homes


NAICS: 32-1991 Manufactured Housing

SIC: 2451 Manufactured Housing

NAICS-Based Product Codes: 32-19911 through 32-199151211


Manufactured homes are homes built entirely in the factory under a federal building code administered by the U.S. Department of Housing and Urban Development (HUD). The Federal Manufactured Home Construction and Safety Standards (commonly known as the HUD Code) went into effect June 15, 1976. The federal standards regulate manufactured housing design and construction, strength and durability, transportability, fire resistance, energy efficiency, and overall quality. The HUD Code also sets performance standards for the heating, plumbing, air conditioning, thermal, and electrical systems. It is the only federally regulated national building code. On-site additions, such as garages, decks, and porches, often add to the attractiveness of manufactured homes and must be built to local, state, or regional building codes.

Manufactured homes may be single- or multi-section and are transported to the site and installed. These homes are less expensive per square foot than site-built homes. Manufactured homes are usually placed in one location and left there permanently (roughly 90 percent of manufactured homes are never moved after installation). Manufactured home residents typically own their home but rent the lot on which it is installed. The two major forms of manufactured homes are single-wides and double-wides. Single-wides are sixteen feet or fewer in width and can be towed to their site as a single unit. Double-wides are twenty feet or more in width and are transported to their site in two separate units, which are then joined together. Triple-wides and even homes with four, five, or more units are also manufactured, although not as frequently.

Manufactured homes should not be confused with other types of homes. Modular homes are built in sections, while manufactured homes are constructed as a single unit. Most of the exterior and interior construction is completed at the time of assembly. Panelized homes come shipped flat from the factory. The walls must then be assembled, typically by a construction crew. The shipment includes all wiring, siding, and trim. Pre-cut homes come in three types: kit houses, dome structures, and log homes. Usually, these pre-cut homes include only the exterior of the house. The owner of such a home must hire a contractor to install the plumbing and electrical systems. All of these homes must comply with the local, state, or regional building codes in which they are installed. Travel trailers, motor homes, and recreational vehicles are primarily vehicles and are not intended to be used as long-term housing.

Early History

In the early 1900s there was strong demand for affordable housing for the growing population. Sears & Roebuck started advertising kit homes to the public in 1908. Companies such as Aladdin and Gordon-Van Tine soon followed. With kit homes, a consumer would order a style from a vendor's catalog, including plumbing and various accessories, and then place the order. The retailer would then deliver the lumber, plumbing and other materials to the home site. The consumer would then receive the kit—full of as many as 30,000 pieces—and assemble the house. Sears reports selling approximately 100,000 kits between 1908 and 1939.

According to the Housing Assistance Council, the housing trailer came into existence in 1910, with wide-spread production beginning in the early 1920s. The trailers were seen as a way to stimulate the tourism industry, just one segment of the overall booming economy in the 1920s. The trailers also acted as primary or temporary residences for some sectors of the population: lower-income individuals, construction workers, and migrant workers. By the 1930s the trailers were much more common. During the Depression which followed the stock market crash in 1929, trailers acted as the primary residences of many families who could no longer afford more permanent housing. Trailers were also useful for those who moved frequently as they searched for work. In 1938 the American Automobile Association estimated that approximately 10 percent of the 300,000 trailers on the market were being used for long-term housing, not travel purposes.

During the Depression, trailer owners would sometimes park their vehicles together and create spontaneous trailer camps. The trailers were an eyesore, and these camps often brought an increase in crime to the area. As the motor homes and parks became more popular in the post-World War II period, some municipalities began to quietly put legislative restrictions into place, restricting the use of mobile homes. Disputes resulting from these restrictions found their way to court. Rulings typically favored the zoning laws of the municipality, in part because there was no national standard to classify mobile homes as either vehicles or housing.

The industry continued to develop in the 1940s and 1950s. The military used trailers to house soldiers and workers. The government assembled 1,000 trailers in 90 days to house workers in Oak Park, Tennessee as part of the Manhattan Project in World War II. The 27,000 residents described the cluster of trailers as a little city. Servicemen returned from the war and flooded the market looking for immediate, affordable housing. In 1956 the first ten-foot wide trailers were introduced. This development radically changed the industry. Before 1956 the length of mobile homes varied but never the width. With the introduction of the ten-wides the structure became more house than trailer. A ten-wide would need to be towed professionally; it could not be towed easily behind a vehicle. The ten-wides became very popular, soon surpassing the traditional eight-wides in production and sales. The ten-footer helped usher in a change in terminology. The market began to refer to such structures as mobile homes rather than trailers.

The quality of manufactured homes improved in the 1960s. Much of the improvements came from recently introduced production methods: pneumatic-powered tools for cutting and nailing materials, higher-quality adhesives, better automation, and more precision in the manufacturing of doors, walls, and windows. The industry again increased the width of mobile homes, from 10 feet to 12 feet and then 14 feet. In 1967 two single-wides were put together to create the first double-wide. Manufacturers began to add fireplaces, skylights, and other architectural embellishments. In 1969 for the first time, the Federal Housing Authority (FHA) authorized mortgage insurance on mobile homes and lots. The FHA had previously recognized these types of homes as suitable for such insurance but took no action to authorize mobile home mortgage insurance until 1969. Production of mobile homes, which had been growing strongly, increased 285 percent from 150,700 units in 1963 to 579,960 in 1973, according to the Manufactured Home Institute and Elkridge & Levridge Inc. Most of this growth, 174 percent, happened between 1963 and 1969 when production increased to 412,700 units in 1969. By 1972 the industry shipped an astonishing 575,000 units, amounting to one-third of all new single family housing put in place that year in the United States.

A number of producers jumped into the market in the 1970s, looking to capitalize on the industry's popularity. Some of these new manufacturers were disreputable and shipped inferior products to the market. They were able to do so in part because there were no standards in place to which mobile home makers were obliged to adhere. Construction standards offered by the Mobile Home Manufacturers existed, however they were strictly voluntary.

In 1974 Congress passed the National Mobile Home Construction and Safety Standards Act, a federal code set by the U.S. Department of Housing and Urban Development (HUD). The HUD Code, which became effective in June of 1976, made mobile homes the only form of private and single-family building subject to federal regulation. The law set mandatory minimum construction standards for insulation, plumbing, electrical, and safety and encouraged the states to establish enforcement offices; currently 37 states have such offices. As important as the construction standards, the HUD Code pre-empted all state and local building codes, ensuring that manufactured homes were legal in every state, and prevented local governments from adopting their own codes to discriminate against them. The effect of the federal regulation was to more clearly define mobile homes as buildings, rather than vehicles. The Housing Act of 1980 adopted this change officially, mandating the use of the term manufactured housing to replace mobile homes in all federal law and literature for homes built since 1976.

The 1990s and Beyond

The 1990s were a period of economic growth after an initial, brief recession in 1990 and 1991. The strong economy of the decade pushed up overall housing costs. This increase drove site-built homes out of the range of some Americans. For some, manufactured housing was a sensible alternative. Such housing was less expensive than a site-built home. Also, the industry was now producing manufactured homes that were attractive and had many amenities. Shipments roughly doubled during the first half of the decade, increasing from 170,213 units in 1991 to 372,843 units in 1998, representing approximately 20 percent of the market for new homes. But the industry was getting itself into trouble. The loan industry was growing more competitive during this time, and many providers relaxed their qualifications for loans. More lenders also started getting into the specialized market of writing loans for manufactured housing. Any losses, the loans providers reasoned, would be offset by the 12-15 percent interest on the subprime loans. Manufactured homes are seen as personal property, so loan rates are higher than those for a mortgage loan.

A conventional home mortgage includes a down payment of 10-20 percent, a credit check, an appraisal of the property, and a fixed rate on the loan. Many manufactured home loans in the 1990s were completed with no down payment and issued within a 2-24 hour application process. Providers issued buyers 30-year mortgage loans; however, 30 years exceeds the life span of many manufactured homes. Many states won't title the homes as real estate unless they are on a permanent foundation on the owner's own land, and many are not; sixteen states will not classify them as real estate at all.

By 1999 the number of repossessions began to increase. It is unclear by how much, for lenders often tried to conceal the number of badly performing loans. Several industry estimates put the figure at between 80,000 and 100,000 units. A 2005 report by Lehman Brothers stated that repossessed inventory went from $300 million in January 1999 to $1.3 billion by the end of 2002.

Conseco purchased Green Tree, which held 30 percent of the manufactured home loan market in 1998. Conseco would be forced to declare bankruptcy in 2002 because of the quantity of bad debt that made up the Green Tree holdings. Conseco's bankruptcy was the third largest bankruptcy after Enron and WorldCom, as of early 2007. Oakwood Homes, once the largest manufactured home maker in the country, likewise saddled with bad loans, declared bankruptcy that same year. Industry shipments fell from 348,671 units in 1999 to 130,802 in 2004. Industry sales were cut in half, falling from $15.5 billion in 1998 to $7.2 billion over the same period.

Loan writers have once again tightened up their policies. Since 2004 the manufactured home industry has found itself struggling to compete in the housing market. Many buyers took advantage of record low interest rates in 2004–2005 and purchased their first homes. Unfortunately, many buyers moved into homes they could not really afford. They were only able to make such a purchase using exotic loan packages, such as no-money-down loans and variable rate rather than a fixed rate loans. Such borrowers could often afford to make payments on a mortgage but only until the rate readjusted upward. Interest rates did go up in early 2006. Roughly 20 percent of the homeowners who were in default in early 2006 lost their homes to foreclosure by the third quarter of the year. The buyer is largely at fault for not understanding his financial situation or the real terms of such loans, of course. However, the loan industry, clearly not learning from the experience of loan providers lending to buyers of manufactured homes in the 1990s, bear some responsibility for approving large loans to people with modest means.

The manufactured home market received a small boost in late 2005 as a consequence of the displacement of hundreds of thousands of people after the summer storms that devastated the Gulf coast that year, Hurricanes Katrina and Rita.


According to the Census Bureau, there were 412 establishments engaged in the production of manufactured homes in 2002, up from 320 in 1997. In 1997 the industry employed 67,470 people. Shipments were valued at $10 billion. In 2002 the industry employed 49,959 people and shipped $6.6 billion in manufactured homes.

Manufactured home shipments increased in the late 1990s as a result of a strong economy, a tight housing market, and a growing availability of credit. Shipments increased steadily from the early 1990s, from 170,713 units in 1991 to 372,843 units in 1998. The industry declined to 130,802 units in 2004. Preliminary estimates for 2005 and 2006 show 146,744 units shipped in 2005 and 117,510 units shipped in 2006. Retail sales have fallen from a high of $15.5 billion in 1998 to an estimated $7.4 billion in 2006. The average price of a manufactured home was $64,200 in 2006. In 1990 the average price was just $27,800. The price has risen as manufactured homes take on many of the characteristics of site-built homes, with porches, fireplaces, high-end appliances and large floorplans.

Clayton Homes was the largest manufacturer of manufactured homes in the United States, with a 27.7 percent market share for the first 11 months of 2006. Fleetwood Enterprises, Inc. followed with 15.4 percent of the market. Champion Enterprises, Inc. was third with a 12.7 percent market share. Palm Harbor was fourth with a 5.6 percent market share. Figure 132 presents these data.

Approximately two-thirds of manufactured homes were placed on private property in 2006, according to the U.S. Census Bureau. The rest were located in manufactured home communities, sometimes called mobile home parks. Less than one-third were titled as real estate rather than personal property. Real estate loans would be written up like a conventional home mortgage. The terms of a personal property loan, however, can vary considerably, with strikingly different rules on interest, fees, and the amount of the down payment. More manufactured homes started to be titled as real estate in 2002. If this overall shift in thinking continues it will help the industry gain further legitimacy.


Clayton Homes, Inc.

This company, headquartered in Maryville, Tennessee, is a subsidiary of Berkshire Hathaway. In 2007 Clayton Homes distributed its products in 49 states through a network of approximately 1,750 retailers (448 company-owned stores and more than 1,300 independent retailers). Clayton Homes operated nearly 70 manufactured housing communities until it sold its housing communities division in July 2007 to a private equity firm. The company also owns financing, loan-servicing, and insurance subsidiaries. Its finance company, Vanderbilt Mortgage and Finance, Inc., is a leader in manufactured home lending, servicing 330,000 customers with more than $11.0 billion in loans.

Fleetwood Enterprises, Inc.

This company produces recreational vehicles, manufactured housing, motor homes, travel trailers, and folding trailers. The company also produces various fiberglass and composite plastic parts. The company operates a lumber brokerage business as well as an import distribution business. It markets its manufactured homes through a network of approximately 1,240 independent retailers in 46 states. The company was founded in 1950 and is headquartered in Riverside, California. It earned revenues of $2 billion for its fiscal year ended April 2006.

Champion Enterprises, Inc.

This company builds a variety of homes and commercial modular structures, including two-story buildings and barracks for non-residential buildings, in the United States and Canada. It also produces steel-framed modular buildings for use as prisons, military accommodations, hotels, and residential units in the United Kingdom. Champion Enterprises sells homes through builders, developers, and approximately 3,000 independent sales centers. The company was founded in 1953 and is based in Auburn Hills, Michigan. Champion had 7,000 employees and generated revenues of $1.28 billion in its fiscal year ended December 30, 2006.

Palm Harbor Homes, Inc.

Together with its subsidiaries, this company engages in the manufacture and marketing of factory-built homes primarily in the United States. It manufactures homes under various brand names, including Palm Harbor, Masterpiece, Keystone, CountryPlace, River Bend, and Windsor Homes. The company sells homes through its own retail superstores and independent dealers, builders, and developers. The company also provides property and casualty insurance for owners of manufactured homes. As of March 31, 2006, the company sold its products in 32 states through 116 company-owned retail superstores and builder locations. The company was founded in 1977 and is headquartered in Addison, Texas. Palm Harbor employed 5,000 people and generated revenues of $705 million for the fiscal year ended March 2006.


The manufactured home industry used $3.75 billion in materials in 2002. Household appliances represented the largest single category of spending, $193.1 million or 5.1 percent of total costs. A total of $155 million was spent on metal doors and door units and windows and window units. Gypsum board, used mostly for interior walls, was the third largest category of material inputs. Total spending in 2002 was $145 million. Other materials consumed include: $109 million in millwork, $108.7 million in plywood, $97 million in siding, and $67.1 million in metal trim and plumbing. Other materials include linoleum, pneumatic tires, heating equipment, insulation, and various motor vehicle parts.

Technology has been advantageous to the manufacturing process. Automation ensures precision cuts and construction to doors, windows, and walls. Enterprise resource planning software helps manage factory inventories and orders. Computer-aided design software may be used to design a manufactured home to customers' specifications, allowing them to select from an array of floor plans, styles, and options, for example types of appliances, fireplaces, and porches. Once built, the manufactured homes undergo a series of quality-control checks in the factory. A truck transports the home to its site, where the installation is completed.

This process has some merit over site-built construction. Being in a factory, the manufactured home is not subject to weather delays that a site-built home faces. Also, it is safe from potential vandalism. The manufactured home is also produced more quickly than a site-built home and it is also less expensive. The average manufactured home cost $64,200 in 2006, a fraction of the $305,900 average cost of a new single family home construction, including structure and land ($225,927 just for the structure). The cost per square footage was lower as well with manufactured homes costing $40.13 per square foot compared to $91.99 per square foot for the average site-built home, according to the Census Bureau. The average square footage of new manufactured homes was 1,600 in 2006 compared to 2,456 for the average new single family site-built home.


There were 3,319 manufactured home dealers in the United States in 2004, according to the Census Bureau. This number represents a decline since 1998, when there were 4,010 dealers. Total employment fell from 43,234 people in 1998 to 27,027 people in 2004. Clayton Homes, Fleetwood, and the other major manufacturers sell manufactured homes though independent or company owned dealerships. Many companies also sell recreational vehicles, campers, and related equipment through these dealers. Manufactured homes are sold without much marketing, so potential buyers are often unaware of how to buy them. Buyers are often uninformed about the overall industry as well.

Zoning restrictions are another impediment to the growth of manufactured housing. Many communities still have not revised their zoning and subdivision standards that govern manufactured housing however, this is changing. These new policies allow the placement of more manufactured homes outside of traditional manufactured home parks. In 2006, according to the Census Bureau, 79,000 of the 111,000 new manufactured homes delivered were placed outside a manufactured home community. Most developments allow modular homes. Those that do not may do so because of continued confusion between modular and manufactured housing.


The Foremost Insurance Group conducts an annual survey of the manufactured home industry. Their 2005 study found the average manufactured home resident was 49.1 years of age. Approximately 64 percent were employed full time and 19 percent of household heads were retired. They were also rather well educated, with 33 percent having completed some sort of college, 19 percent completing an Associate or Bachelor's degree and 3 percent attaining a post graduate degree. The median income was $35,000, and the net worth was $60,000. Nearly three-quarters (72 percent) were occupied by two to four people. While the government is explicit about the differences between manufactured and mobile homes, the distinction seems lost on the actual residents of such structures. Approximately 57 percent of respondents told people they live in a mobile home; only 16 percent used the term manufactured home.

There were approximately 124.5 million housing units in the United States in 2005. Manufactured housing represented 7 percent of these units. Florida had more than 800,000 manufactured homes, followed by Texas with more than 700,000 such homes. North Carolina, New Mexico, and South Carolina are the three states for which manufactured homes represent the highest proportion of housing stock, just shy of 20 percent in each state. These states are known for their high number of retirees and low-income residents. Florida and Texas are known for tight, expensive housing markets. Manufactured homes may be the only housing option for some residents of these states.


The Census Bureau does not track the mobile home park industry specifically, instead choosing to lump it in with the leasing of airport space, sports venues, and other types of specialized properties. This lack of good data raises all sort of questions about how this industry works, the status of legislation that governs it, and where and how it operates on a daily basis. However, the statistics that the Census does offer suggests a shrinking industry: 9,361 firms in 2004, down from 10,913 in 1998. Land is in high demand in the United States, and land near urban areas will be quickly snapped up for industrial or commercial development. The low-income residents of these parks will be the ones to suffer.

In April 2007, for example, the owners of a mobile home park in Syosset, New York sold the park to luxury condominium developers. The 250 residents of the park found themselves with a trailer and no land to put it on. This points out a key problem for manufactured and mobile home owners: they own the home but usually just rent the plot of land on which the home is situated. Many in the Syosset park were seniors and on the lower-end of the income bracket; the park was their only way to live so close to the city.

Site-built homes are the primary market adjacent to the manufactured homes market. The housing market in the United States had been quite robust during the late 1990s and early 2000s. Figure 134 presents data on U.S. housing starts, as measured by building permits issued. The sale of existing homes has also been on a strong trajectory during the first years of the twenty-first century. They peaked in 2005, according to the National Association of Realtors, reaching just under 6 million homes sold. The pattern of strong growth in the housing market came to an end in 2006 when rising interest rates slowed sales and began to cause an increase in the inventory of housing stock on the market.

Manufactured home makers must compete with the apartment rental industry, which can offer attractive rates and packages to lure tenants. It also competes with other segments of the factory-built home industry, such as modular housing. Buyers may also hesitate to purchase a manufactured home as it will not appreciate in value the way a site-built home often does. The industry also still faces negative associations with old, depression-era mobile homes and trailer parks.


Manufacturers have been continually improving the quality of their products, making them more durable and better insulated. They have also added numerous amenities to help these homes compete with site-built homes.

The National Weather Service has developed more sophisticated weather prediction technology. Through real-time modeling and other functions, the National Weather Service is better to predict when bad weather may develop and predict its behavior. This would allow them to provide earlier warnings to the members of mobile homes and manufactured housing facilities, who are particularly vulnerable to tornadoes and heavy storms.


Modular Homes

Modular homes received favorable attention in the media in 2006 and 2007. Consumers were educating themselves on factory built homes, and learning the differences between modular and manufactured homes. Modular homes were seen as nearly indistinguishable from their site-built counterparts. They were seen as better constructed than manufactured homes, with more attention to insulation, construction, and design. A few analysts have suggested that because of their factory construction they may even be superior to site-built homes in many respects. Modular homes may prove to be more durable than manufactured homes in regions prone to flooding and hurricanes. Modular homes are attached to the property foundation, making them more able to withstand a hurricane than a typical manufactured home. Modular homes can be made of concrete, stone, or other durable materials. Some modular homes can be installed on supports above land, keeping them away from potential floods.

Mobile Home Trailers

The Federal Emergency Management Agency (FEMA) spent $2.7 billion to buy 145,000 mobile home trailers (very low-end manufactured homes) after Hurricanes Katrina and Rita hit the Gulf Coast in August and September 2005. They paid a bulk-rate price of approximately $19,000 per unit. Some of these trailers were placed on the homeowners' own property when this was possible. Other storm victims went to live in FEMA operated trailer parks.

A significant, but unspecified, number of these FEMA trailers were never used. FEMA wanted to keep a number of trailers across the southern states in the event of another catastrophe. The largest collection of unused trailers was at an unused airfield in Hope, Arkansas. The small town, and childhood home of former President Bill Clinton, has now earned the unfortunate nickname of trailer town for the nearly 11,000 trailers believed to have been located by the town airport in early 2007. The estimates of exactly how many trailers were being stored there vary greatly. In March 2007 FEMA announced plans to sell off 46,000 trailers. They would only auction off the used trailers that were defective in some way—homes with stained carpets or missing propane tanks, for example. The news set off a panic among manufactured home dealers, who feared that the number of low-cost trailers hitting the market would cripple the industry. Some of these trailers to be sold had unusually high levels of formaldehyde and other toxins, according to testing by the Sierra Club. The first sales conducted in March 2007 netted FEMA approximately 40 cents on each (taxpayer) dollar spent.


Three groups of customers make up the primary target markets for producers of manufactured homes. These groups are defined by age and by location of residence. The young who are starting out and do not yet have savings sufficient to use as a down payment for a site-built home is one group. The elderly are another group targeted by sellers of manufactured homes. After retirement people often wish to downsize their homes and some wish to have low maintenance homes that allow them to travel easily, leaving the home for long periods of time. These life style choices work well for owners of manufactured homes. The third group of customers targeted by producers of manufactured homes are those who live in areas with a relatively high cost of living. In such areas, land and real estate tend to be very costly, putting the purchase of real estate beyond the reach of even the middle class. In such markets, the option of a manufactured home set on a leased lot may provide an economical options for those wishing to own the home in which they reside.


California Manufactured Housing Institute,

Clayton Homes,

Manufactured Housing Institute,

U.S. Department of Housing & Urban Development,


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