New Home Buyers Struggling with Rising Costs and an Inflated Housing Market Turn to Modular

For the past year families, businesses, and communities have been struggling to adapt to disruptions caused by the coronavirus pandemic. No other segments of the economy may have been as significantly impacted as the housing and construction industries.

Family migration from urban locales to suburban and rural areas across the country contributed to record-setting home prices in multiple markets. Supply chain disruptions in lumber and steel markets have similarly caused the cost for new construction to skyrocket, as these commodity prices have continued to increase with each passing month.

This dichotomy has left new, and often first-time, home buyers in a precarious position: is it more preferential to overpay for an existing home that you will likely choose to renovate in the future, or commit to new construction tailored to your liking with the fear of sudden price increases looming in the weeks and months ahead?

Prospective homebuyers who have endured the unfortunate experience of repeatedly being outbid on existing homes, or have received multiple estimates for new construction only to receive updated quotes weeks later reflecting material price increases, can sympathize with these frustrations. Many of these buyers have turned to modular construction to provide them with a greater level of cost-certainty in this volatile environment.

Similar to the role modular construction has played in the wake of natural disasters such as Hurricane Sandy in NJ and Hurricane Harvey in TX, modular construction has been an increasingly popular alternative for homebuyers struggling with the industry-wide disruptions caused by the coronavirus pandemic.

As home prices continue to rise with inventory quickly diminishing, more buyers are exploring the various building options available to them. While traditional site-built construction is still in high-demand, the associated prolonged stages of construction coupled with material price increases impacting each proceeding stage is a risk that leaves many struggling with this decision wary of committing to a particular project.

By the time my builder completes the site-preparation and foundation work, will the price quoted to me to frame/wire my house months later still be honored? Unfortunately, most builders will not be able to answer this question with confidence, through no fault of their own. The prices of construction materials continue to rise, outside the control of whomever you engage to build your home for you.

Modular construction has served as a means to alleviate these concerns for new home builders. Though families who invest more time designing and customizing their new home may receive material price increases throughout the planning stage of their project, once the home is in production with a reputable manufacturer the risk of potential price increases is largely diminished.

Shortly after executing your contract to build with a modular construction company, your foundation services can be performed on-site on a coordinated schedule with the construction of your home off-site, reducing the risk of material price increases across multiple prolonged stages of construction completed solely on-site.

Only a few short months after your home is placed on a manufacturer’s production schedule, a brand-new home will be delivered to your property up to 80% complete. As the home is already prefabricated off-site, the remaining on-site work to be completed is largely labor-intensive and less susceptible to the fluctuations of material price increases, giving buyers a greater level of comfort and cost-certainty when they execute their contracts for new construction.

Buyers who have taken a “wait and see” approach at the onset of COVID also appreciate the expedited construction timelines modular construction affords them to compensate for time lost waiting for the housing and materials markets to stabilize. With proper planning, using modular construction can expedite a project timeline by up to 50% compared to that of site-built construction, making it an enticing alternative for buyers who would otherwise not be partial to building their own home.

As families and communities adapt to the challenges created by the coronavirus pandemic, so too must the construction industry at large.

Crises and challenges provide an opportunity for innovation. To better service the needs of their clients, builders must be able to quickly adapt to the volatile environment. Utilizing the innovative technologies of modular construction to simultaneously complete multiple stages of construction at once will continue to increase in popularity as these buyer frustrations continue to mount. In the wake of countless crises, modular construction has endured as a cost-effective solution to a region’s housing needs. As the country grapples with the prolonged effects of the coronavirus pandemic, modular construction will continue to serve as a reliable alternative for buyers’ housing needs.