Millennials and Manufactured Housing: An Affordable Option for First Time Homeowners

With home prices soaring and traditional ownership becoming less attainable, millennials are seeking affordable alternatives like manufactured housing. Offering modern designs and significantly lower costs, these homes are reshaping the housing landscape for younger buyers. Many millennials are drawn to the flexibility, affordability, and quality that manufactured housing provides, making it a popular option for those entering the market. As economic pressures continue, this trend signals a broader shift in how younger generations approach homeownership.

Millennial Homeownership & Manufactured Housing

1) Affordability Challenges:

• Millennials, aged 26-41, are now the largest living generation in the U.S., totaling 72.1 million individuals. However, they face unique and significant challenges when it comes to homeownership. The rapid rise in housing prices, coupled with high inflation and increasing mortgage rates, has made purchasing traditional site-built homes unaffordable for many.

• Between 2020 and 2022, housing prices increased by almost 20% year-over-year, which has priced many millennials out of homeownership, especially in urban areas where property values are particularly high​. The average cost of a new site-built home in the U.S. reached $464,200 in 2021, significantly out of reach for younger adults whose incomes have not kept pace with the rising costs​.

• As a result, millennials have delayed home purchases, leading to just under 50% homeownership among this group, compared to 70% for Generation X and 80% for Baby Boomers​. This delay is largely driven by the prohibitive costs of entry-level homes in traditional markets.

2) Increased Openness to Manufactured Housing:

• The affordability crisis has caused millennials to explore alternative forms of homeownership, with manufactured homes becoming an increasingly attractive option. This shift is driven by the growing perception that manufactured housing can offer quality, affordable homes without the high financial burden associated with site-built homes.

• A 2022 Freddie Mac survey found that 68% of millennials are open to purchasing a manufactured home, citing affordability as the primary motivator. Similarly, 61% of Gen Z also expressed interest in considering manufactured housing.

• Manufactured housing is particularly appealing to millennials because it offers a cost-effective solution without sacrificing quality. For example, the average price of a new manufactured home in 2021 was $108,100, which is less than a third of the price of a site-built home, making it an affordable alternative for first-time buyers​.

• 78% of millennials reported having a positive view of manufactured housing, with 20% expressing an “extremely positive” perception. The affordability factor resonates strongly with this group, as they are actively seeking affordable pathways to homeownership amidst challenging economic conditions.

3) Migration to Rural Areas:

• In addition to the affordability of manufactured homes, many millennials are now considering relocating to rural areas where the cost of living is lower and housing options, including manufactured homes, are more abundant. The combination of high urban housing costs and the increasing acceptance of remote work (a trend that accelerated during the COVID-19 pandemic) has encouraged many millennials to explore smaller towns and rural regions​.

• A survey of older millennial consumers found that 37% of city-dwellers expressed a desire to move to a smaller town to cut down on living expenses​. This migration trend is reflected in the increasing demand for manufactured homes in rural states like Texas, Florida, and North Carolina, which saw substantial shipments of new manufactured homes​.

Demographics of Younger Adults Viewing Manufactured Housing Favorably

1) Broad Demographic Appeal:

• Younger generations, including both millennials and Gen Z, have demonstrated a growing interest in manufactured housing. The 2022 Freddie Mac survey revealed that 72% of all consumers believe manufactured homes are a great option for first-time buyers. This sentiment is particularly strong among younger adults, with 66% of all surveyed consumers agreeing that manufactured homes are “affordable without compromising on quality”.

• Millennials are leading this shift in attitudes. In addition to 78% of millennials expressing a positive view of manufactured housing, 68% of them reported being likely to consider purchasing a manufactured home in the near future. Among Gen Z, the corresponding figure was 61%, indicating that both younger generations see manufactured housing as a viable and realistic alternative to traditional homeownership.

2) Shifting Attitudes Toward Homeownership:

• Historically, manufactured housing was seen as a less desirable option, primarily targeted toward low-income and older demographics. However, this perception has changed in recent years, particularly among younger consumers. Today’s manufactured homes offer higher quality, modern designs, and customizable features that appeal to millennials and Gen Z​.

• For millennials, the desire for homeownership remains strong, but economic realities such as the housing crisis, the rise in mortgage rates, and the growing cost of living have reshaped their approach to achieving this goal. Manufactured homes offer a lower entry point to the housing market, allowing younger buyers to achieve the milestone of homeownership without the significant financial burden​.

3) Manufactured Housing Mortgages:

• Younger consumers have become a key demographic in the manufactured housing market. In fact, consumers under the age of 44 accounted for 54% of all manufactured home mortgages in 2021, showing a clear trend of younger homebuyers gravitating toward this option​.

• The data also shows that millennials are outpacing the national average in terms of the percentage increase in manufactured home mortgages. Between 2018 and 2021, millennials saw a higher-than-average rise in manufactured homeownership compared to older generations.

As millennials and Gen Z face rising home prices, manufactured housing is becoming a top choice. With 68% of millennials and 61% of Gen Z likely to consider buying a manufactured home, affordability is key. These homes are priced at $108,100 on average, significantly lower than the $464,200 for site-built homes. With 78% of millennials viewing them positively, manufactured housing offers an affordable path to homeownership and is gaining traction among younger buyers as they seek quality and value in today’s challenging market.