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The global modular construction market is likely to reach over $850 billion in construction by 2025, thanks to rising demand for cost-effective, and premium residential development. According to the US Census Bureau, the average price for manufactured homes reached $87.3 k in February, 2021 in US. Moreover, the total number of manufactured homes in the US reached 8.1 thousand of units in total in the month of February. The high-price tag associated with these homes speaks volumes about the growing demand for premium manufactured homes in the US in the current year.
This also confirms what many believe the potential of modular homes for the future, with rising demand for efficiency, and quality in these homes. The slow pace of growth in the commercial establishment sector remains a challenge for growth in the global modular construction market. However, growing demand for high-end manufactured or mobile homes will likely create new opportunities for growth in the global modular construction market.
Despite the premium quality products in the modular construction market, the housing also promises to meet demands for low-income households with affordable homes. According to the US Census Bureau, the price of modular homes, or manufactured homes remains half the price of the site-built homes today. This happens due to the prefabricated structure, designs, and speedy construction method for prefab homes. These homes can be constructed without consideration for conventional problems like weather conditions, making construction delays a thing of the past, saving enormous costs, and delivering quick returns.
On the other hand, in countries like the US, the construction costs have resulted in a nationwide affordable housing crisis. According to the National Low-Income Housing Coalition, there is a shortage of 7 million affordable homes in the nation’s 11 million low-income families. Moreover, there is no state in the US wherein a renter on minimum wage can afford a two-bedroom apartment. Moreover, 75% of the US population in low-income groups is severely cost-burdened, while paying more than half of their income in rent. On the other hand, the price per square foot for regular homes in 2017 stood at $111, while the price for modular homes stood at $50 in the same year. The growing association of quality with modular homes, and increased need for cost-effectiveness to solve the affordable housing crisis will present major opportunities for growth in the global modular construction market.
Modular Homes to Exhibit Strong Growth During the Forecast Period
Despite the interchangeable definition of modular homes and manufactured homes in general due to their low-costs, there is a key difference between these two. The manufactured homes are designed according to standards laid down by HUD or the Department of Housing and Urban Development. Manufactured homes similar to modular homes offer options for customizations. However, these are largely pre-built according to the national code laid out by HUD. On the other hand, modular homes are governed by local codes and laws as per their destination. This makes building modular homes a little more complex while encouraging the growth of manufactured homes in key markets of North America. Conventionally, modular homes offered an option for relocation, thanks to their lack of concrete foundation. However, today these are based on a strong structural foundation, making it impossible to relocate them as necessary. On the other hand, modular homes are shipped to the site, and then set on the foundation. The rising demand for low-income housing and the increasing need for mobility among the population will likely drive significant growth for modular homes in the near future. Moreover, the modular homes and manufactured homes both come equipped with several amenities including appliances, paint, utilities ready to be hooked, and lights, among others. The growing demand for ready-to-live homes for rented apartments, their increased cost-effectiveness, and growing demand for affordable homes in the US will present major opportunities for growth in the global modular construction market.
Demand for Modular Homes Remains Robust in Developing Countries
The global modular construction market will exhibit robust growth in Asia Pacific, thanks to rising demand for affordable construction. The issue of affordable construction remains equally poignant in developed as well as developing countries, wherein the growth of modular homes will likely pick up growth as consumer shifts drive growth. The large population in Asia Pacific, the rising disposable income, and increased interest in modular homes will remain a key trend during the 2021-2028 period in Asia Pacific. Moreover, the experience in the developed world has taught manufacturers that modular homes increase in values similar to regular homes. Moreover, insurance premiums, and others also remain the same. Hence, the growing demand to tackle the housing crisis for millions in the Asia Pacific will remain a major opportunity for growth in the modular construction market during the 2021-2028 period.
The Global Modular Construction Market Report is Segmented as Follows:
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