Why Prefabrication Is Construction’s Next Big Thing

Throughout the first half of the 1900s, many American families realized the dream of homeownership for the first time thanks to house-building kits. Most famously spearheaded by Sears, Roebuck & Company, the idea behind house-building kits was simple: aspiring homeowners could choose their home blueprint from a catalog, request alterations to the design as needed, and then have all the components shipped directly to the build site, ready for assembly. Many of these homes are still standing and providing comfortable living spaces today. Some are even on local registers of historical sites.

This basic idea has received some reconsideration and modernization in recent years. Prefabrication – oftentimes called modular construction – is seeing a renaissance. Now, house kits don’t arrive in total disassembly. The difference is that, today, builders receive finished building sections – assembled modules – instead of a shipment of building components. Anyone who’s mulling the idea of building a home should know about prefabrication in construction, its benefits, and its probable impact on the construction industry.

What Is Prefabrication?

The basic idea behind prefabrication hasn’t changed, although the format has.

Back in the Sears-Roebuck days, builders received freight cars containing everything they needed to assemble a home. For all intents and purposes, this is still stick-built construction, though. That is, they’re assembled component-by-component onsite.

Today, instead of piles of packaged building materials, builders receive finished portions of a home.

Instead of being shipped in their fully deconstructed states, these buildings are assembled in sections in climate-controlled manufacturing facilities. After being transported to the build site, professionals assemble the home in a manner not unlike a huge Lego set.

Are Mobile Homes Prefabricated?

There is a distinction worth making between prefabricated homes and mobile homes. Mobile homes are assembled in their entirety in a factory setting, and then are shipped to the building site. This is different from a modular house, which builders assemble and transport in sections.

Mobile homes historically have not held their value nearly as well as traditional stick-built homes or modular homes. That’s beginning to change in light of the COVID-wrought turbulence in the real estate market.

However, it is still unwise for prospective homeowners to look at mobile homes as a reliable investment vehicle. Their financial performance is much more favorable to landlords than to owners. In some states in the U.S., mobile homes are not even legally considered real estate – they’re classified as personal property.

Prefabricated modular homes, however, are a different story. As we’ll soon see, prefabricated homes can be cheaper to build, often last longer, and represent a more positive and consistent investment opportunity for owners.

Is Prefabrication Cheaper than New Construction?

Assuming a similar level of building expertise, prefabricated homes can be cheaper to bring to habitable status than brand-new stick-built homes by 10-25%.

These savings come from builders buying materials in bulk rather than on a per-project basis, along with the efficient, assembly-line-style assembly process. There is a substantially reduced need to invite carpenters and electrical and plumbing experts to the build site as well, since most house systems are already incorporated into the modules.

Certain familiar expenses still apply, such as buying the land itself, testing the soil, applying for permits, and paying to have the utilities connected to municipal sources. There may be finishing work required as well, such as installing or fine-tuning fixtures. Prefabricated home packages also may not include the cost of preparing the foundation, landscaping, or driveway, either.

What Are the Advantages of Prefabrication?

The cost savings are just one piece of the big picture, however. Developers, builders, and clients should familiarize themselves with the other benefits of prefabrication so they know the whole story.

More Durable

Prefabricated homes are constructed indoors in controlled environments, away from the elements like snow or pouring rain. Because of the greater level of control offered, plus the lack of disruptions and distractions from inclement weather, these homes end up being just as durable, and oftentimes more so, against high winds and natural disasters than their fully stick-built counterparts.

Lower Ongoing Costs

Having tighter seams throughout the home is another advantage of the more tightly controlled assembly process for prefabricated homes. Once the dwelling is complete, this means heating and cooling systems can work more efficiently.

More Sustainable and Energy-Efficient

Most builders design their prefabricated homes from the ground up to focus on energy-saving structural elements, efficient appliances and amenities, and sustainable building materials.

One way this manifests is through biomimicry – or the process where built assets take on characteristics from the natural world. From using the mechanics of pinecones for humidity control to shaping buildings for natural airflow, prefabrication takes advantage of all manner of nature-inspired, forward-thinking design principles.

Bamboo flooring, alternative energies, and rainwater harvesting systems are all popular additions to prefabricated home packages too.

Green-minded features like these provide the end-user with a worry-free experience and no need for material or system upgrades for the foreseeable future, which further reduces construction waste and redundancy.

What Do I Need to Know About Buying a Prefab Home?

A U.S. government report compiled by the Federal Housing and Finance Agency in 2018 found that modular homes appreciate value in a similar fashion as stick-built homes. How well a home retains its value is one of the chief concerns for home-seekers. But what else is worth knowing about prefabrication?

How Customizable Are Prefabricated Homes?

Very! Back in the days of Sears-Roebuck, it was common for families to request alterations to the blueprints before receiving their materials. The same is still true, even if the modules are assembled before shipment. Homeowners can alter the structural layout and room configurations to their heart’s content in a way they never could with a preexisting dwelling.

Customization can add to the final cost, but the changes will be more seamlessly integrated than with an after-the-fact renovation on a stick-built home.

Prefabrication: What Kind of Mortgage Do I Need?

The process of financing a prefabricated home isn’t much different than the process of buying a traditional dwelling. Future homeowners will need to secure a home-construction loan from their preferred lender, which requires a down payment.

The difference between a home-construction loan and a traditional mortgage is the down payment. If you’re seeking financing for a prefabricated home, the lender will probably require at least 20% down in advance.

This loan will cover the cost of construction. Once the structure is complete, the loan turns into a permanent mortgage, and the homeowner commences making monthly payments for the remainder of the loan duration.

Prefabricated Homes Are on the Rise but Misconceptions Remain

The final word of advice for anyone mulling a prefabricated building project – whether to invest or live in – involves misconceptions.

As mentioned, homebuyers often mistake “modular” homes for “mobile” homes. When the time comes to sell a prefabricated modular home, sellers may need to be patient. Undoing these widespread misconceptions could take time, despite the well-documented advantages discussed above. Buying a modular home also won’t help homeowners decide where they want to settle down. There are significant advantages to choosing this type of dwelling, including longevity. But deciding where to put down roots could take longer than the project itself. These houses are intended to stand the test of time, so build them someplace with lasting appeal and proximity to work, family, amenities, and other can’t-live-without features.