Study: Mobile, Traditional Homes Appreciate at Similar Rates

September 18, 2018

Manufactured homes are seeing the same type of appreciation as traditionally built homes, which is counter to conventional wisdom about mobile homes.

Motor home with interior lights on

© Stefan Randholm - Moment/Getty Images

The findings come from a new report from the Urban Institute, in which researchers analyzed data from the Federal Housing Finance Agency on manufactured homes (also known as mobile homes) that were financed with loans guaranteed by Fannie Mae and Freddie Mac.

Researchers found the average annual growth rate is 3.4 percent on a mobile home versus an 3.8 percent uptick for traditional, site-built homes. Further, researchers note that in some areas, home prices have even climbed at a faster pace for manufactured homes than on traditional properties.

Manufactured housing is more common in some parts of the country. For example, Alabama, Florida, Louisiana, North Carolina, and Texas comprise 41 percent of the manufactured housing market.

Many homeowners who finance the purchase of a manufactured home do not get a traditional mortgage. They may own the structure but tend not to own the land underneath too. That means they’re subject to rising costs from renting a lot, and these homes typically aren’t actually mobile so owners may be forced to sell if the land prices get too high. Many manufactured owners will get a chattel loan, which is a personal loan that is more similar to a car loan. These loans tend to come with higher interest rates.

“Although there are limits to what the data can tell us, the index suggests a need to reevaluate the presumption that manufactured homes do not appreciate at the same rate as site-built homes,” the Urban Institute researchers note in the report.