With the available inventory of homes for sale reaching record lows across much of the U.S., economists are betting on manufactured homes (mobile homes or trailers) as the solution for a market in desperate need of affordable housing.
Manufactured homes already house around 17.7 million Americans, which is 5.6 percent of the population. They also provide shelter for around one in ten households that live below the poverty line, Apartment List said in a new report.
Apartment List senior research associate Sydney Bennet said this number is set to increase as the demand for affordable homes becomes more acute.
Manufactured homes do afford their residents significant savings. Residents who either rent or own a manufactured home in the nation’s top 100 metro areas spend an average of forty percent less on their housing than those who live in traditional homes, Apartment List’s report says. The average monthly gross housing cost, which includes rent or mortgage payments and property taxes, lot rent for mobile homes and utilities, for a mobile home is $564, compared with $1,057 for a traditionally built home or apartment.
As such, manufactured homes could be a viable option for senior citizens on fixed incomes, the reort suggests. It notes that we’re already seeing a growing number of “upscale” mobile home parks appearing across the country that cater specifically to the 55-plus crowd. These parks offer spacious double-wide trailers, plus community centers and pools among their amenities.
However the process of buying a mobile home is different to that of buying a regular home, as they’re usually sold separately from the land. Mobile homes can also be classified as either real estate property or personal property. If a mobile home is classified under the latter designation, it cannot be bought with a regular mortgage, but instead with a chattel loan, which comes with shorter terms and higher rates.
Still, these loans are likely to become more popular. Mortgage financing giants Fannie Mae and Freddie Mac both see mobile homes as a solution to the affordable housing problem, and have put plans in place to finance more loans for these kinds of properties in future.
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