From factory floor to front door

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Published Date 2/11/2025

It’s not surprising that homebuyers’ eyes are turning to whatever they can get in these days of high housing prices and unforgiving interest rates. That includes prefabricated homes—also known as modular and manufactured homes.

Realtor.com’s Lisa Marie Conklin clarifies how prefab houses are not only football fields less expensive than your typical home—they’re often just as beautiful, with today’s new offerings often being easily mistaken for a traditionally built home.

She explains how buying land to put a prefab home on is part of the adventure. “Do you want to live on 40 lush acres in Stockton, MO? A desert oasis in Joshua Tree, CA? Or how about an off-grid lot in Grants Pass, OR? The possibilities are endless,” she says.

Prefabricated homes are much more than the sum of its parts, being constructed via an assembly line production in sections inside a factory and then assembled on-site.

“Modular homes are constructed to the same standards as conventionally built homes and must meet regional building codes,” says Conklin, adding how homebuyers can choose from one- or two-story homes in a wide variety of floor plans and architectural styles.

Manufactured homes, a variety of prefab homes, don't need to comply with local building codes but must adhere to the strict federal building codes set by the U.S. Department of Housing and Urban Development. While they aren't as customizable as modular homes, they offer several different floor plans and add-ons.

All those tiny homes? Prefab structures that are built in factories and then assembled on site. ADUs (accessory dwelling units) are a popular version of them and they are catching fire all over the U.S. You can even buy them on Amazon.

Pricing? “First, there's the cost of the prefab home itself,” says Conklin. “The average sales price of a manufactured home is $124,300, according to the most recent HUD and Census Bureau data. Meanwhile, a 600-square-foot, two-story tiny home that comes complete with a roof deck, glass sunroom, and up to four bedrooms is currently for sale on Amazon for $49,999.

But wait. There’s more. Like land. Once you find your little piece of heaven, you've got to pay for site preparation—including clearing the land, laying the foundation, and possibly testing the soil.

Then there’s transporting the home to the site, as well as securing permits and inspections, all of which can be costly. Plus, you’ll need a contractor to put your house parts together. Few DIYers are up to the task. And don’t forget setting up utilities like water, electricity, and sewage, and hooking them up as well.

And yes, there are boundaries. You can't just plop down your new modular or manufactured home anywhere you like, as many neighborhoods don't permit them to be among their mix. So do your due diligence before signing on the dotted line, which includes researching zoning ordinances, setbacks, and other requirements before your home can be delivered.

Modular, prefab, and manufactured home consultants are there to help, however. "Our home consultants help future homeowners navigate the land-buying process to accommodate the home they are interested in purchasing," says Clayton Homes’ Danny Warrick.

Setting up electricity and internet services is relatively easy if you buy a lot in town, but if your heart is set on a rural location, you could hit some snags. “Don't just assume you will be able to get electricity because you see a pole with wires or a cellphone tower nearby. Check with your local individual provider first,” says Conklin. “The same goes for internet service.”

Tapping into city water and sewer lines is also easier in an urban or suburban setting. Rural home sites? Not a cakewalk, as the property will need to pass a percolation test for a septic system and a well, according to Warrick.

Urban settings are not without their challenges, as crowded towns can have low-hanging utility wires, overgrown trees, and department-of-transportation-specific routes for transporting wide loads. So consult with your dealer before purchasing the land or the home, and have them do a site inspection, say experts.

Preparing the land means clearing it, grading it, and adding a foundation or concrete footings. Just make sure to account for all these expenses when planning the budget for your prefab home, as they can quickly add up.

SmartAsset’s Amelia Josephson says The Pros of Prefab Homes points out, however prefab homes offer exceptional energy efficiency due to their tight seams and state-of-the-art windows, fast construction, and most of all, affordability.

“If you’re open to buying an existing home, compare the costs of what’s available on the market with the cost of building a prefab,” says Josephson. “And remember that various levels of fittings and customization can raise or lower the cost of your prefab. Talk to the manufacturer about cost-cutting strategies available to you.”

Realtor, SmartAssets, TBWS

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