The Biden Administration Wants to Boost Manufactured Housing Production. Younger Adults See Good Investment Potential

As part of its Housing Supply Action Plan, the Biden administration earlier this year announced programs aimed at making the financing and development of manufactured homes easier. A recent Morning Consult survey finds that about half of Americans see alternative housing such as mobile homes as a good investment, with younger generations more likely to be interested in these types of homes. 

Older generations skeptical of the long-term value of housing such as mobile homes, backyard flats

• Among the public overall, 49% said that housing options such as mobile homes or accessory dwelling units (ADUs) are a good long-term investment generally, including 60% of Gen Z adults and 61% of millennials.
• Perceptions about the quality of life in mobile home parks may still drive baby boomers’ opinions of manufactured housing, as 45% of those surveyed said these homes are not a good long-term investment.

Younger generations, non-white potential homeowners show higher interest in manufactured homes

• When it comes to considering the purchase of a mobile home, backyard flat or other manufactured housing unit, boomers are least taken with the idea, with 10% saying they are very interested and 19% saying they are somewhat interested. 
• Hispanic (25%) and Black adults (19%) are the racial groups most likely to say they are “very interested” in purchasing a backyard flat or manufactured home, followed by white adults (17%) and other races/ethnicities (16%). 
• From a regional perspective, Americans in the West (21%) and South (18%) are most likely to be “very interested” in these types of housing, ahead of those in the Midwest (15%) and Northeast (13%).

While mobile homes, ADUs may open up options for potential homebuyers of color, it may also make those buyers subject to higher-cost loans and qualification inequities

While baby boomers and Gen Xers are skeptical about the value of these homes as a long-term investment, younger generations are warming up to the idea, with content creators on TikTok showing off their more affordable, brand-new homes, and others lauding them as the original tiny homes. 

Affordability may come at a price, however. 

Following the Biden administration’s housing plan announcement in May, the Federal Housing Administration released a proposed rule in October to increase loan limits for its manufactured home loan program, and the Federal Housing Finance Agency introduced plans to increase financing for manufactured housing via Fannie Mae and Freddie Mac.

Lance George, director of research and information at the Housing Assistance Council, noted in testimony to the House Appropriations Committee in May that financing costs for manufactured homes “can be much greater than for conventional housing mortgages,” as the “chattel” loans often used to finance manufactured homes are more similar to auto loans than conventional mortgages.

The Urban Institute has also drawn attention to the potential pitfalls of chattel financing, especially for borrowers of color, who represent a disproportionately high share of chattel loan borrowers. The think tank noted in its August report that 64% of all chattel loan applications were denied in 2021, though among Black applicants that rate was 76.3%.

Owners of mobile homes or other dwellings also face risks related to the fact that they often do not own their own land and may have to rent the lot on which the dwelling resides, putting them at the mercy of landowners. Owners have experienced issues with lot quality, as well as rising rents and issues with the sudden loss of their lots when developers make other plans for the land.  

The Sept. 30-Oct. 1, 2022, survey was conducted among a representative sample of 2,210 U.S. adults, with an unweighted margin of error of plus or minus 2 percentage points.