Menu Close

Do Modular Homes Grow in Value the Same as Regular Homes?

Buying a home is a major financial and life milestone for people looking to settle down with their family or loved ones. Modular homes that were once considered of cheap quality have grown in popularity over the recent years competing with regular homes built from the ground up. Understanding the difference between modular homes and traditional homes before building or buying your house can help you make decisions that you will appreciate for a lifetime. Many factors determine the value of a home whether it is modular or stick-built. This article discusses modular homes in depth to find out whether they grow in value the same as regular homes.

Modular Home Construction and its Resale Value

new modular home

Modular homes are treated the same as homes built on-site because they are set on a traditional foundation even though the house is assembled from pre-built sections. After construction, professionals inspect modular houses to ensure they adhere to local building codes. Unlike stick-built homes, you can customize a modular home to some degree based on personal preferences.

Different manufacturers offer modular homes in different layouts, sizes, and construction timing. Similar to site-built homes, they are titled as “real” property so that homebuyers can have the same legal rights and protections, same financing options, and same tax treatment. Both types of housing options share many similarities that it is sometimes difficult to distinguish between modular and regular homes just by looking.

Estimating the resale value of a modular or site-built home depends on several factors such as age, location, and condition of the dwelling. One of the major reasons why a modular home may be valued differently than stick-built homes is because of the negative stigma surrounding modular construction. Since modular homes are not highly concentrated in many housing markets, it creates the impression that they do not appreciate at a similar rate as homes built on-site. In reality, modular homes appreciate at the same market rate as site-built homes in the same neighborhood.

Why the Value of Modular Homes Grows the Same as Regular Homes?

  • Similar Foundation

The foundation in which a home is built is one of the greatest factors that determines its durability and longevity. Modular homes are a good investment because they are installed on a solid and permanent foundation, similar to site-built homes. This makes them unique from mobile homes that are built on a chassis and can be shifted from one location to another at any time. Under state law, a home built on a permanent foundation qualifies to be treated like any other single piece of real estate.

  • More Financing Options

A major advantage of buying a modular home is that it comes with extra financing options that you cannot get with other types of homes. Although a modular home qualifies for home financing and standard mortgages, it is possible to get a better deal from the modular home manufacturer. They often give special discounts to their customers to keep the factory busy and encourage new home orders. Since the cost of a modular home is significantly lower than site-built houses, it gives an instant appreciation between the actual cost and the market value of the home.

  • Better Construction Quality

Since modular home construction takes place in a well-controlled environment, it is more likely to achieve better quality than a standard site-built house. Everything including the sturdiness of the walls, roofing, and other structures within the house is taken into account before it is assembled on a permanent foundation. The workmanship quality and consistency used in modular homes boosts its value because the majority of materials used are always similar or better than what is used in site-built homes.

  • Age and Condition

As long as a modular home is in perfect condition and abides by local building standards, its value grows the same as a regular home. Lacking modern improvements in your older stick-built or modular home negatively affects its resale value. However, a modular home in perfect condition is likely to have a higher resale value than an old stick-built home that is neglected and in poor condition. Any home that needs urgent repair could depreciate because the cost of fixing them can prevent buyers from making offers, forcing you to lower your sale price.

Buying or building a home is one of the biggest investments people make in their lifetime. Although the cost of building a modular home is relatively lower than a stick-built home, it can grow in value the same as a regular home if it is made with better quality materials and meets the local building codes in your area.

Related Posts