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US Prefabricated Housing Market

  • February 2013
  • -
  • Freedonia
  • -
  • 226 pages

US demand to expand 15% annually through 2017

Demand for prefabricated housing through 2017 will benefit from an expected recovery in overall US housing demand from the subdued 2012 level. Prefabricated housing demand is forecast to expand 15 percent annually through 2017 to 135,000 units. The US prefabricated housing industry encompasses a number of shelter products -- manufactured, modular, precut, and panelized housing -- that reduce the need for on-site construction. While the rebound in overall housing demand will boost demand for all prefabricated housing, the trends will differ for manufactured housing and other prefabricated types. Manufactured housing’s market share is projected to drop from that of the 2007- 2012 period as conventional mortgages become easier to obtain. Thus growth in manufactured housing demand will trail that of overall single-family housing demand. For other prefabricated housing, market shares will be little changed, and demand increases will be similar to that for single-family housing overall.

Manufactured housing has gained share of total prefabricated housing market

Over the past decade and a half, the fate of manufactured housing has differed markedly from that of the other prefabricated housing products. Manufactured housing suffered declines in demand almost every year for the past decade. The decline actually began in the late 1990s, when manufacturing housing lenders increased approvals to subprime borrowers for low and no down payment loans. As the US economy cooled at the turn of the millennium, some of these borrowers defaulted on their loans, generating a rise in repossessed units, which then competed with new units. From 2002 through 2006, the easy availability of mortgage credit led many potential purchasers of manufactured housing to opt instead for conventionally built units. The result was a declining market share for manufactured housing from 1998 through 2005. The collapse of overall US housing demand from 2006 through 2009 further reduced the absolute demand for manufactured housing, but it also contributed to a slight rise in market share. As mortgage credit terms tightened and lenders were less willing to write loans for conventional housing, some households turned to manufactured housing, especially for smaller, single-section units. Other prefabricated housing types maintained a relatively steady market share over the 2002-2012 period, and as a result, the level of demand was related to overall US housing demand. As housing demand boomed, other prefabricated housing saw gains in unit demand. When housing demand collapsed, unit demand dropped as well.

US shipments to reach $4.6 billion in 2017

Trade in prefabricated housing is minimal, and shipments will generally track domestic demand. Manufactured housing shipments are expected to reach $4.6 billion in 2017, a vast improvement from the 2012 level, but still below that in 2002. Through 2017, shipments of other prefabricated housing types are projected to rise to $3.0 billion. Advances will be fueled by rising unit growth after a period of depressed demand. Price increases will account for a significant portion of this growth, as increased raw materials prices and a shifting product mix raise the average cost of units produced.

Study coverage

This upcoming industry study presents historical demand data (2002, 2007, 2012) plus forecasts for 2017 and 2022 by prefabricated housing product and US regional market. This study also considers market environment factors, evaluates company market share, and profiles 27 industry competitors.

Table Of Contents

US Prefabricated Housing Market

TABLE OF CONTENTS

INTRODUCTION ix

I. EXECUTIVE SUMMARY 1

II. MARKET ENVIRONMENT 4

General 4
Macroeconomic Environment 5
Consumer Trends 8
Personal Income and Expenditures 9
Consumer Financing 11
General 12
Manufactured Housing 15
Green Building Trends 17
Demographic Trends 19
Population 19
Households 23
Residential Construction Expenditures 24
Housing Starts 26
Housing Stock 30
Urban/Rural Housing Patterns 34
Pricing Trends 36
Market Trends 38
Real Estate Development 42
Foreign Trade 43
International Environment 45

III. OVERVIEW 49

General 49
Unit Outlook 52
Value Outlook 55
Cost Advantages Relative to Site-Built Housing 57

IV. MANUFACTURED HOUSING 60

General 60
Outlook 61
Producers 64
Product Design 66
Single-Section 67
Double-Section 69
Three or More Sections 70
Cost Comparisons 71
Regulatory Issues and Trends 73
HUD Code 74
Delivery 75
Zoning 75
Community Ownership 77
Financing 78
Customer Base 81
Buyer Characteristics 81
Regional Variation in Demand 82
Market Penetration by State 86

V. OTHER PREFABRICATED HOUSING 89

General 89
Modular Housing 91
Technology 93
Producers 95
Precut Housing 95
Product Types 96
Log Houses 97
Other Precut Houses 98
Producers 99
Panelized Housing 99
Technology 101
Producers 102
Cost Comparisons 102
Regulatory Trends and Issues 103
Building Codes 104
Regulations and Affordability 105
Customer Base 105

VI. DEMAND BY REGION 107

General 107
Regional Demographic and Economic Trends 107
Population 108
Economic Outlook 111
Housing Trends 114
Regional Outlook for Prefabricated Housing 117
Northeast 120
New England 122
Middle Atlantic 122
Northeast Prefabricated Housing Trends 123
Midwest 126
East North Central 129
West North Central 130
Midwest Prefabricated Housing Trends 131
South 134
South Atlantic 136
East South Central 137
West South Central 138
South Prefabricated Housing Trends 140
West 142
Mountain 144
Pacific 146
West Prefabricated Housing Trends 147

VII. INDUSTRY STRUCTURE 150

General 150
Industry Composition 151
Integration 152
Revenues 153
Market Leaders 155
Other Industry Participants 161
Manufacturing 161
Automated Manufacturing Processes 162
Comparison to Site-Built Techniques 162
Product Development 163
Competitive Strategies 164
Marketing 166
Distribution 167
Mergers and Acquisitions 169
Cooperative Agreements 172
Company Profiles 173
All American Group Incorporated 175
American Homestar Corporation 177
Athens Park Homes, see Champion Home Builders
Barden and Robeson Corporation 179
Barna (Jim) Log and Timber Homes 181
Beaver Mountain Log and Cedar Homes Incorporated 182
Berkshire Hathaway Incorporated 184
Cavco Industries Incorporated 187
Century Homes, see Fairmont Homes
Champion Home Builders Incorporated 192
Clayton Homes, see Berkshire Hathaway
Coachmen Industries, see All American Group
Commodore Corporation 194
CountryPlace Mortgage, see Cavco Industries
Discovery Custom Homes, see Cavco Industries
Excel Homes Group LLC 197
Fairmont Homes Incorporated 200
Fleetwood Homes, see Cavco Industries
Friendship Homes of Minnesota, see Fairmont Homes
Honkarakenne Oyj 202
Horton Industries Incorporated 203
Innovative Design and Building Services, see All American
Group and Excel Homes Group
Jacobsen Manufacturing Incorporated 205
Liberty Homes Incorporated 206
Live Oak Homes 207
Log Investors, see Jim Barna Log and Timber Homes
Majestic 21, see Berkshire Hathaway and Nobility Homes
Manufactured Housing Enterprises Incorporated 208
Mod-U-Kraf Homes, see All American Group
Muncy Homes Incorporated 209
Nationwide Custom Homes, see Cavco Industries
Natural Spaces Domes Incorporated 212
Nobility Homes Incorporated 214
Oak Creek Homes, see American Homestar
Original Log Cabin Homes Limited 216
Palm Harbor Homes, see Cavco Industries
Platinum Homes, see American Homestar
Prestige Home Centers, see Nobility Homes
Professional Building Systems Incorporated 217
Ritz-Craft Corporation 218
Signature Building Systems of PA LLC 219
Skyline Corporation 221
Standard Insurance Agency, see Cavco Industries
Sterling Premium Building Systems, see Wausau Homes
Suwannee River Log Homes, see Original Log Cabin
Homes
Town and Country Cedar Homes 223
21st Mortgage, see Berkshire Hathaway
Wausau Homes Incorporated 225

LIST OF TABLES

SECTION I -- EXECUTIVE SUMMARY

Summary Table 3

SECTION II -- MARKET ENVIRONMENT

1 Macroeconomic Indicators 8
2 Personal Consumption Expenditures 11
3 Consumer Financing Environment, 2002-2012 15
4 Population and Households 23
5 Residential Building Construction Expenditures 26
6 Housing Starts 29
7 Housing Stock by Type 32
8 Housing Stock by Location and Type 35
9 Average Retail Housing Prices 38
10 Prefabricated Housing Market, 2002-2012 40
11 US Foreign Trade in Prefabricated Housing 45
12 World Prefabricated Housing Demand 47

SECTION III -- OVERVIEW

1 Prefabricated Housing Supply and Demand 54
2 Prefabricated Housing Shipments by Value 56

SECTION IV -- MANUFACTURED HOUSING

1 Manufactured Housing Supply and Demand 63
2 Manufactured Housing Shipments by Company, 2012 65
3 Single-Section Manufactured Housing Shipments 68
4 Double-Section Manufactured Housing Shipments 70
5 Three or More Section Manufactured Housing Shipments 71
6 Manufactured Housing Placements by State, 2012 84
7 Manufactured Housing Placements as a Share of Housing
Starts, by State, 2012 86

SECTION V -- OTHER PREFABRICATED HOUSING

1 Other Prefabricated Housing Supply and Demand 91
2 Modular Housing Shipments 93
3 Precut Housing Shipments 96
4 Panelized Housing Shipments 100

SECTION VI -- DEMAND BY REGION

1 Population by Region 111
2 Gross Domestic Product by Region 114
3 Regional Housing Starts and Sales 117
4 Prefabricated Housing Demand by Region 119
5 Northeast Prefabricated Housing Demand by Subregion 121
6 Northeast Prefabricated Housing Demand by Product 125
7 Midwest Prefabricated Housing Demand by Subregion 129
8 Midwest Prefabricated Housing Demand by Product 133
9 South Prefabricated Housing Demand by Subregion 136
10 South Prefabricated Housing Demand by Product 141
11 West Prefabricated Housing Demand by Subregion 144
12 West Prefabricated Housing Demand by Product 148

SECTION VII -- INDUSTRY STRUCTURE

1 US Prefabricated Housing Sales by Company, 2012 155
2 Selected Acquisitions and Divestitures 171
3 Selected Cooperative Agreements 173

LIST OF CHARTS

SECTION II -- MARKET ENVIRONMENT

1 Year of Construction of Housing Stock, 2012 33
2 Prefabricated Housing Market, 2003-2012 41
3 Housing Starts by Type, 2002-2012 41
4 World Prefabricated Housing Demand, 2012 48

SECTION III -- OVERVIEW

1 Prefabricated Housing Shipments by Product, 2012 55
2 New Home Pricing, 2002-2022 57
3 Prefabricated Housing Total Costs, 2012 59

SECTION IV -- MANUFACTURED HOUSING

1 Manufactured Housing Market Share, 2012 66
2 Manufactured Housing Placements by State, 2012 85
3 Manufactured Housing Placements as a Share of Total
Housing Starts by State, 2012 88

SECTION VI -- DEMAND BY REGION

1 Prefabricated Housing Demand by Region, 2002-2022 119
2 Northeast Prefabricated Housing Demand by Product, 2012 126
3 Midwest Prefabricated Housing Demand by Product, 2012 133
4 South Prefabricated Housing Demand by Product, 2012 142
5 West Prefabricated Housing Demand by Product, 2012 149

SECTION VII -- INDUSTRY STRUCTURE

1 Prefabricated Housing Market Share, 2012 157

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