Modular Homes: Everything You Need to Know About Going Prefab

Photo: Getty Images

When you hear the term modular homes, you probably think of something akin to mobile homes on cinder blocks—temporary solutions for would-be homeowners that are far from the dream homes they hope to one day occupy. The truth, of course, is more complicated, and by the time you learn more about this fast-growing segment of the home-construction industry you may think, This is the home for me.

We’ve spoken to industry experts about the history, making of, and pros and cons of modular homes to give you the scoop on this old-but-new way of building homes, piece by piece.

What are modular homes versus manufactured homes versus mobile homes?

To get into the concept of modular homes, we need to go back to mobile homes—which, technically speaking, no one has made in the US for half a century.

After World War II, mobile homes exploded in popularity but were essentially unregulated. Often little more than trailers converted temporarily or permanently into makeshift houses, they were relatively cheap but not exactly the epitome of comfort or safety.

In the mid-1970s, Congress and the Department of Housing and Urban Development passed laws and regulations that changed the landscape of the industry, setting down new standards and requirements and, importantly, literally redefining the product. From then on, what had been known as mobile homes were now officially “manufactured homes.” Technically speaking, manufactured homes are homes that are mostly built in a factory, transported to their permanent site, then assembled on-site on a foundation—all while meeting federal codes.

<h1 class="title">Pre-fabricated modular wood commercial building being assembled with crane</h1><cite class="credit">Photo: Getty Images</cite>

Pre-fabricated modular wood commercial building being assembled with crane

Photo: Getty Images

The big difference between modular homes and manufactured homes is that modular homes also abide by state and local codes for housing, which are almost always stricter than federal codes but also vary from town to town and state to state. The rest of it—being mostly manufactured at a factory then assembled on a foundation on-site—is the same, differentiating these prefab housing solutions from “stick-built homes,” the term often used for homes built in the traditional way, entirely on-site. Nowadays, modular construction has evolved to the point where the craftsmanship can rival that of traditional homes and homebuyers can pick from almost any style and configuration they could imagine.

“The modular industry started from a trailer that pulled behind a car, so for decades, if you wanted a modular home, you opened a book and picked a model out,” says Gary Casazza, owner of a modular-home sales company in New Jersey and a member of the board of the Modular Building Institute. “In the last 30 years, that's changed—today, they’re custom homes.”

Not that modular homes are a new trend, though: You could famously mail order an entire home in a variety of styles and have it delivered straight to you via the Sears catalog from 1908 to 1942. And America’s first prefab home was shipped over in pieces from England to Cape Ann, Massachusetts…in 1642.

Casazza says the residential construction industry is essentially catching up to the efficiencies and improved standards introduced in other fields, like automobile manufacturing, where companies reduce time and expenses spent by streamlining the process with the help of modern assembly practices. Shifting the bulk of the manufacturing to centers with specialized experts just makes more sense than doing everything locale by locale, he says.

“If I said to you, ‘Should you buy your car from the local gas station up the road?’ you’d look at me as if I had two heads,” he says. “Homes today are more complicated than cars. We have simplified cars that are built like a Lego set. Homes are more complicated, but [many people think we have to] still build them the old-fashioned way.”

<h1 class="title">A new wooden modular prefabricated house inside in manufacturing facility</h1><cite class="credit">Photo: Getty Images</cite>

A new wooden modular prefabricated house inside in manufacturing facility

Photo: Getty Images

How are modular homes built?

“A misconception with modular homes is they come 100% finished,” Casazza says.

In fact, you have to do a lot of work at the final site before a modular home can even roll out of the factory. Contractors have to prep and level the area, dig the permanent foundation, place the pilings, pour the concrete and install the sill plate, the thing that connects the factory-built parts of a modular home to the foundation. Every site is different, so the specifics differ, too, but the gist is that it’s always a lot of work. “This is no different than a site-built home,” Casazza points out about these initial stages.

But that’s where the similarities end.

“Everything from the sill plate up is done in the factory and installed by crane,” he says. “All homes are a series of boxes that are put together. Wherever the boxes join [for a modular home], you have to do the sheetrock work on-site. Same with the flooring.”

So once the boxes that make up the home are stuck together, the electricity and plumbing have to be hooked up.

<h1 class="title">Prefabricated container houses in building under construction</h1><cite class="credit">Photo: Getty Images</cite>

Prefabricated container houses in building under construction

Photo: Getty Images

“The electric for the homes comes installed. The boxes have to be connected and the wires brought to the cable box,” Casazza says. “Then the plumbing has to be connected—about 20% of the plumbing is done on-site, and 80% in factory. The connections to the street for plumbing and electricity have to be done on-site.”

The last steps include the crane operator and set crew putting on the roof (which comes on hinges) and the final waterproofing. Everything is typically installed to the construction-industry standard of 1/4-inch tolerance.

There’s one part of modular homes that’s definitely a plus over stick-built homes, though.

“[Y]our bathrooms and kitchens are usually 100% done,” Casazza says. “That’s probably the most time-consuming part of a [traditionally built] house, the bathrooms and kitchens.”

How are modular homes built in the factory?

Modular homes are built in smaller, connectable pieces—the modules that give modular construction its name, of course—in factories that are often far from their eventual sites. Each segment is built to the relevant standards and ready to integrate into their slots once they arrive on-site.

“Clayton off-site built homes, including modular homes, are constructed inside a climate-controlled home building facility, allowing for a more efficient building process,” says Ron Powell, president of Clayton Manufacturing, largest builder of off-site built housing. “A modular home can be anywhere from 70% to 90% complete when it leaves the building facility. The level of completion depends on the features chosen by the homebuyer and design of the floorplan. That final 10% to 30% of the construction is typically the fit and finish-type amenities that buyers associate with quality.”

These factories are huge, and the work is done indoors, unlike houses built on-site, meaning that they’re not subject to the kinds of environment stresses that stick-built homes usually endure for months as they’re slowly put together.

“The lumber doesn’t get wet and dry out,” Casazza says. “It’s a very simple system. If you look at the way bridges or ships or skyscrapers are built, they’re built with a series of parts from a factory that has shipped them out and put them together on-site. That’s what the modular industry is doing.”

There’s also one important similarity to stick-built homes that people aren’t aware of, Powell says.

“Modular homes are constructed using the same standard materials found in traditional site-built construction, including lumber, windows, doors and appliances,” he says.

Where can you build a modular home?

Local zoning restrictions dictate where modular homes can go, and passing this hurdle is often the hardest part of the whole process for many people.

“Off-site construction is often zoned out or relegated to the outskirts of cities and towns,” Powell says. “Our industry is working closely with municipalities across the country to help ensure that off-site built homes are permissible as a homeownership solution.”

Still, it’s easier than it used to be to put in a modular home.

“When I started in the industry, you’d go into towns and they would say, ‘We don’t let modular homes into this town,’” Casazza says.

How big can modular homes be?

Size is arguably the most critical limiting factor of any modular home—and not for the reason you may think.

“They’ve got to be driven down the highway,” Casazza says

That means that, depending on where the sections of your modular home have to travel, each section can’t exceed the dimensions that are safe on the road. In most of New Jersey and Pennsylvania, for example, Casazza says, the maximum width is 15 feet and 6 inches, and the maximum height is 65 feet, though you can go wider in rural areas like southern New Jersey. Tennessee-based Clayton, on the other hand, manufactures modular home sections up to 16 feet wide and 76 feet long.

“This can be a challenge if your home site is heavily wooded,” Powell says. “Branches will need be trimmed and trees removed.”

In short, don’t expect modular homes in, say, Florida, to be given the same leeway as in Texas—you and your team will have to research what you can get away with.

That all said, “most modular home floor plans built by Clayton range from 1,500 to 2,200 square feet and include three to four bedrooms,” Powell says.

Do modular homes come in different styles?

Manufacturers can make modular homes in a variety of styles, and most people would be hard-pressed to tell the difference between a modular home and a stick-built home once they’re completed.

<h1 class="title">Construction of new and modern modular house. Walls made from composite wooden sip panels with styrofoam insulation inside. Building new frame of energy efficient home concept.</h1><cite class="credit">Photo: Getty Images</cite>

Construction of new and modern modular house. Walls made from composite wooden sip panels with styrofoam insulation inside. Building new frame of energy efficient home concept.

Photo: Getty Images

Before the manufacturer even begins putting the parts together, a prospective homebuyer talks to the company about what kind of home they want. The manufacturer typically has a catalog of common styles (like Cape Cod, colonial, Arts and Crafts, ranch homes, and so on) and layouts homebuyers can choose from, though the modularity of the sections means you can mix and match—as long as they meet the constraints of highway safety laws, local codes, and the manufacturer’s capabilities.

Casazza, for example, says he offers about 200 off-the-shelf designs, while Clayton also has a wide variety.

“Farmhouse-style homes were our top homes in 2023, with the Southern Charm floor plan being our most popular,” Powell says. Clayton doesn’t currently offer multifamily layouts, and it would almost certainly be harder for multifamily modular homes than single-family homes to pass muster with local building codes and zoning requirements.

Clayton has also introduced a new line of homes called CrossMod Homes, which Powell describes as using a blend of off-site and on-site construction practices for homes on permanent foundations.

How long do modular homes take to build?

From browsing the catalog to crossing the threshold to your new home, you could see a modular home in move-in condition much more quickly—sometimes half or even a third of the time—than it might take for a comparable stick-built home, experts say.

“Because the home is being constructed on an assembly line, with all the various construction trades located in one spot, a home can be completed in as little as two days,” Powell says. “The land prep and foundation work can happen concurrently. This can pull months out of the typical on-site construction process.”

“I put in writing that I’ll complete the home within six months, and I’ve never gone longer,” Casazza says. In fact, he says, what tends to slow down modular home construction the most is the homebuyers arguing with each other over exactly what they want the layout to be and what they want to go in it.

“The longest part is the decision-making on what you want,” Cassaza says. “They always say they’ll decide in a week, but the fastest I’ve seen is a month.”

<h1 class="title">Crane lifting a wooden building module to its position in the structure.</h1><cite class="credit">Photo: Getty Images</cite>

Crane lifting a wooden building module to its position in the structure.

Photo: Getty Images

Do modular homes save you money?

Both Casazza and Powell stressed that the primary savings with modular home construction is in the time, not necessarily the money—though faster construction time almost always also means spending considerably less.

“The largest savings in a modular home is in the speed,” Casazza says. “Let’s say you’re building a home for $1 million. That costs money—someone has to pay that money cost when no one’s living in the home. A modular home narrows that up so much, from a vacant piece of land to someone living inside it within six months, as opposed to a traditional home build taking a year, year and a half.”

“The biggest benefit of off-site home building is time,” Powell agrees.

By leveraging economies of scale, modular-home construction can also negotiate with suppliers to get discounts on fixtures, appliances, and so on, passing on savings to their clients. But, just as with Lowe’s or Home Depot or Costco or Sam’s Club, that means a limited number of base options.

“[When it comes to] the theory behind a big-box store, a modular home’s not much different,“ Casazza says. “A modular home goes to Moen and says, ‘Your most widely sold faucet is the one with the pulldown sprayer. We’ll take 10,000 of them next year, but we want to pay $160 instead of $190, and that’s the faucet we’re going to offer. If I had a customer who was a chef who wanted a different faucet, I can get him his new faucet down the road, but the buyer’ll pay more. If the manufacturer has a deal with Andersen Windows but wants Pella, they can get Pella—but it’ll cost them more.”

Compared to a custom home that’s stick-built, you’d spent a lot less with a modular home on an architect too. “All they have to do is draw the room sizes and elevations, and that’s a lot of savings,” Casazza says.

Powell says an entry-level Clayton layout would be nearly a 66% savings over an average stick-built home (assuming a minimal price for the vacant lot). “Clayton offers modular-home floor plans starting at $150,000, not including delivery or home installation, setup costs, or land,” he says. “The average price of a new site-built home is over $450,000 including land. In addition to strong partnerships with key vendors, we’ve vertically integrated our supply chain. We build our own windows, doors, cabinets, and roof trusses. All of this allows us to pass those savings on to homebuyers.”

And that’s all before you factor in the long-term energy savings.

Are modular homes more energy-efficient than regular homes?

Because they’re mostly built inside in controlled environments, modular homes are usually more energy-efficient than comparable homes built entirely on-site.

“Construction takes place inside a building facility, so your materials are never subjected to weather degradation,” Powell says. “Additionally, the use of jigs and fixtures ensures a tight building envelope that improves the home’s energy efficiency.”

Manufacturers also routinely use or offer energy-efficient appliances, fixtures, and other features meant to drive down energy bills. Plus they’re built inside a specialized facility, so it’s much easier to pressure-test modular-home sections to make sure they meet Energy Star standards.

Are modular homes safe?

Modular homes still suffer from their historical association with mobile homes—including the mental image Americans have of trailer parks being torn apart by tornadoes and other natural disasters. The truth, our experts say, is that factory-built homes are probably safer than similar stick-built homes.

Third-party inspectors check out the building work both as sections are assembled at the facility and put together on-site—coming by noticeably more frequently than they would for homes built entirely on-site. “Each home is inspected multiple times throughout the construction process to confirm proper construction and quality,” Powell says.

And because each section has to be able to withstand the rigors of being driven on the US highway system, local roads, and construction sites, they’re also inherently sturdier. “A modular home is built with 30% more wood than a site-built home,” Cassaza says." “It has to be picked up with a crane, it has to go down the highway, [so] it must be built stronger than a site-built home to meet those standards. [Even] the junctures are actually stronger—they’re engineered connections from box to box, inspected locally.”

How hard is it to maintain a modular home?

Remember how sections of a modular home are such tightly built units when they leave the factory and how the junctures connecting them on-site are especially well-done? That can actually make certain home repairs trickier later on, Casazza says.

“It’s a very good system: You get less nails and screws,” he says. “The disadvantage is that if you want to take a piece of sheetrock down, it’s built so well that it’s harder. But, on the other hand, the structural integrity is so good that’s it’s easier to add on to [a modular home].”

That said, you still have to take care of a modular home just as you would with any other.

“All homes require maintenance, and an off-site built home is no different than any other home,” Powell says. “Properly maintained, the lifespan is the same as a site-built home.”

Do modular homes appreciate in value like a regular home?

It’s hard to do an apples to apples comparison since the way real estate appreciates has so much to do with the factors that are unique to each property and time of sale, such as the economy, supply and demand, location, condition, history, and so on. But the fact that a house is a modular home or stick-built home doesn’t seem to have any effect on its resale price, the experts say.

“An off-site built home is no different than an on-site built home,” Powell says. “Studies show off-site built homes appreciate in value the same as site-built homes.”

Casazza says that it won’t be long before the distinctions between modular homes and homes built entirely on-site disappear from the public mind.

“Change is coming—it’s just a matter of how long it takes,” he says. “Eventually, we’ll look at a local site-built home and think it’s not as good as a modular—that’s where the industry’s heading.”

Originally Appeared on Architectural Digest