Post Pandemic Tailwind for Manufactured Homes, Headwinds for New Site-Built Housing?

Indications are that production shipments and sales of manufactured housing exiting the COVID-19 pandemic have sparked a renewed appreciation and demand for America’s high-quality affordable homeownership.

The June 2021 new HUD Code manufactured home production and shipment data for the top 10 shipment states are displayed below, provided by the Manufactured Housing Association for Regulatory Reforn (MHARR), on behalf of the U.S. Department of Housing and Urban Development (HUD).

Those just released statistics indicate that HUD Code manufacturers produced 9,430 homes in June 2021, a 24.6% increase over the 7,568  new HUD Code homes produced during June 2020. Cumulative production for 2021 now totals 53,750 homes, a 16.4 % increase over the 46,165 homes produced during the same period in 2020.

The top ten shipment states from the beginning of the industry rebound following the recession in August 2011 through June 2021.

  State                             Cummulative     Current Month (June 2021)         2021             2020  

1. Texas                    128,321                       1,638                                                9,339           8,514
2. Florida                  46,877                            646                                                4,347           3,282
3. Louisiana             43,637                          497                                                 2,872           1,858
4. No. Carolina       32,857                           578                                                 3,129           2,720
5. Alabama              32,008                          448                                                 2,574           2,230
6. Mississippi          26,780                          399                                                 2,288           1,805
7. California            26,025                          305                                                  1,700            1,712
8. Michigan              25,978                          366                                                  2.031            1,614
9. Kentucky             24,095                          369                                                  2,030           1,667
10. Tennessee           20,881                           313                                                   1,755            1,598

Notes:  The shipment data results in no change to the cumulative top 10 list – The production/shipment statistics does not include “modular” homes produced by HUD Code manufacturers –  California is the only top 10 state that did not result in increased shipments year over year.

On-Site Home Building Permits fell 5.1% in June 2021, Looking For Modest Rebound In Second-Half  Of  Year

 According to a Reuters report, U.S. homebuilding increased more than expected in June. However, expensive lumber, as well as shortages of labor and land, continued to constrain builders’ ability to fully take advantage of robust demand for housing. Permits for future homebuilding fell 5.1% to a rate of 1,598 million units in June.

Demand for all housing is being driven by low-interest rates and migration from cities in search of spacious accommodations in the suburbs and other low-density areas for home offices and schooling during the COVID-19 pandemic. But the tailwind is gradually fading as vaccinations allow companies to recall workers back to offices in city centers.

“We look for a modest rebound in home sales and new home construction in the second half of the year, said Sam Bullard, a senior economist at Wells Fargo in Charlotte, North Carolina.

The supply of previously owned homes is near record lows, leading to double-digit growth in the median house price.

A survey from the National Association of Home Builders showed confidence among single-family homebuilders fell to an 11-month low in July. The NAHB noted that “builders continue to grapple with elevated material prices and supply shortages, particularly the price of oriented strand board (OSB), which has skyrocketed more than 500 percent above its January 2020 level.