Manufactured Housing 2021: Never a Better Time to Buy
Manufactured Housing 2021: Never a Better Time to Buy
What is in store for the manufactured housing industry in 2021? AMHA gives some insight on what to expect for the new year.
If you are in the market or thinking about making the move into a manufactured home, this article is for you. With big shifts in the housing market taking place over the course of the last year — thanks largely in part to the ripple effects of a global pandemic — it’s important to prepare for the year ahead if you are looking to buy a home.
As a whole, we faced nothing short of an unprecedented year in 2020. When it comes to manufactured housing, however, thankfully not everything that resulted as a consequence of the pandemic was entirely negative. For example, interest rates on manufactured homes are currently historically low due to the state of the global economy, creating ideal opportunities for buyers. Even more, with the worldwide rollout of vaccinations, in-factory home production is expected to pick up throughout 2021 and the recent shortage in materials, manpower and supplies is projected to diminish. Though manufactured home producers are continuing to catch up on new home orders that have been delayed because of the pandemic, we see the “backorder” as a good problem to have, as it means manufactured homes far and wide continue to sell.
Here you will find a wealth of information surrounding the manufactured housing industry and the positive pivots and industry “comebacks” expected throughout 2021. We see the new year as a clean slate and positive opportunity for both manufacturers, retailers, and buyers.
Use this manufactured housing 2021 outlook to aid you in the shopping and purchasing process, as well as to help you better understand current topics such as financing and everything needed to stay current in the manufactured home industry.
Mortgage Rates and Home Availability
2020 has been one of the most challenging years in history, but the real estate market continues to be one of the bright spots in economic recovery. As mentioned, housing mortgage rates remain at historic lows because of the current state of the global economy. During such periods of economic uncertainty, the Federal Reserve lowers interest rates in order to stimulate growth, which means that borrowing costs become cheaper.
Low interest rates are good for homebuyers and owners as it reduces their monthly mortgage payments. In real estate, this translates in advantageous home loan interest rates (below three percent). That means that manufactured housing – an already affordable housing option for many Americans – is now likely more affordable than ever.
Getting Back to Work
With the worldwide rollout of various COVID-19 vaccinations, many individuals are beginning to look toward getting back to work and into their offices after having their places of business unforeseeably shuttered or having to work from home throughout most of 2020. Manufactured housing had to deal with an unavoidable backlog in home production as the pandemic limited production in various ways including material and labor supply.
As mentioned, we see such a backlog issue as a good thing. As manufacturers are able to safely return to work, manufacturing is getting back on track.
Opportunities for Inventory
According to a report by the Home Buying Institute, the National Association of Realtors says that housing market inventory in the U.S. declined throughout 2020, meaning that the number of homes listed for sale at any given time was lower year-over-year, as many folks were likely choosing to hunker down for the year instead of choosing to make a big move during a global crisis.
Our housing market forecast for 2021 predicts a continuation of low sale inventory, at least into the first part of the year; however, it’s worth noting that manufactured housing presents a unique opportunity for potential homebuyers. Instead of being limited to a pool of homes that are readily available on the market, manufactured home buyers have the opportunity to design and build a prefabricated home from the ground up, buying or renting a piece of land on which the home will then be positioned on after construction.
In this sense, buyers are not restricted to the limited inventory options available on the market once they begin looking to buy; and their 2021 options are virtually endless. Especially with manufacturers being back in the factory, designers and fabricators will be readily on-hand to assist new buyers in designing the custom-built home of their dreams.
A Good Time to Refinance
Those record-low interest rates of 2020 have spurred many homeowners to refinance their existing manufactured home loans. But there are still millions of homeowners in the U.S. who could benefit from refinancing, thanks to the generally downward trend in mortgage rates. Whether a fixed rate, adjustable rate, FHA loan, VA loan or so on, 2021 could prove to be the right year to refinance your manufactured home loan, if you are already the owner of a manufactured home.
Of course, you will need to meet some qualifications in order to refinance your manufactured home. Most likely, your manufactured home:
will have to have been built after June 15, 1976
will have to be in conformance with HUD construction and safety standards
must be a minimum of 400 ft²
loans must also cover the land that your home sits on
be on a permanent foundation and cannot be situated in a trailer park or flood zone
We at AMHA predict an overall strong and satisfactory outlook for the manufactured housing market for 2021. Bottom line: we will recover from the pandemic and we will continue to prosper as an industry.
Throughout most local real estate markets across the U.S., sellers will continue to have the upper hand in 2021, due to tight inventory conditions, but the manufactured housing industry will continue to give the buyers’ market an assortment of options and price points to choose from. For more information on the manufactured housing industry and to connect with local manufactured home retailers in your area, visit the AMHA website.