Blog Posting # 819; Copyright 5 November 2024. EducateMHC
Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable-attainable, factory-built housing (a.k.a. another type of offsite construction). And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’), comprise the commercial real estate (‘CREs’) component of MH! EducateMHC is the online advocate, official historian, trade term & trend tracker, as well as information resource for both business models, and to a lesser extent, the recreational vehicle (‘RV’) industry. Access EducateMHC visa (317) 881-3815; email gfa7156@aol.com, and via www.educatemhs.com to purchase Community Management in the Manufactured Housing Industry and SWAN SONG – a history of land lease communities & official record of annual MH production totals since 1955. Also my autobiography, From SmittyAlpha6 to MHMaven, describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership, as well as freelance consulting, and authoring many nonfiction texts.
George Allen is the sole emeritus member of the Manufactured Housing Institute (‘MHI’), a founding member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, MHInsider magazine’s ‘Allen Legacy’ columnist and editor at large. He’s a Vietnam combat veteran, retired lieutenant colonel of U.S. Marines, author/editor of 30 books and chapbooks on MH, communities, business management, prayer, and figures of speech.
Introduction to the ‘Whole U.S. Housing Story’
Remember, this monthly (‘Whole U.S. Housing Story’) report continues to be a ‘work in progress’. While I’ve been working on the outline and content for six months, only now do I feel close to articulating an easy to read, understand, and apply format.
As I asked rhetorically last month (i.e. in blog # 814), ‘What is the ‘Whole U.S. Housing Story’?’ And what types of single-family residential housing are included in this NEW comprehensive monthly statistical survey? Well, here goes:
The ‘Whole U.S. Housing Story’ is intended to be a monthly collection and summary of ALL types of ‘housing starts’ throughout the U.S. Present-day reports include only ‘single-family, site-built housing starts’! Other forms of housing, like HUD-Code manufactured housing, modular & panelized housing, and Park Model RVs are not included, but should be, for complete picture!
So, let’s begin with ‘offsite construction’. This is a relatively new housing category, a.k.a. factory-built housing that includes 1) HUD-Code manufactured housing, 2) modular & panelized (or ‘prefab’) housing, and 3) Park Model recreational vehicles (‘RVs’). In time, ‘offsite construction’ might come to include additional types of ADUs (Accessory Dwelling Units), e.g. Tiny Houses, sophisticated ‘sheds’, customized steel storage containers, even 3-D Printer-produced houses.
Then there’s the market dominating single-family, site-built housing ‘starts’. This far larger housing category has long been the sole and all-inclusive measure of housing performance in the U.S., but generally not including offsite construction (i.e. except for HUD-Code housing on permanent foundations).
So, where does monthly housing ‘start’ data originate? The easiest to track, is the number of single-family, site-built housing ‘starts’ researched and published monthly online by the U.S, Census Bureau. Visit census.gov/construction/nrc/pdf/newresconst/pdf Once there, visit the Monthly New Residential Construction website, and you’ll see ‘seasonally adjusted annual’ totals. Divide the monthly ‘start’ total (actually seasonally-adjusted annual ‘start’ total) by 12 months to get a clean monthly ‘start’ figure. Details to follow.
Now to research the offsite construction category of housing. This involves three sources and a calculation.
HUD-Code manufactured housing monthly production is tracked and reported, to subscribers, by the Institute for Building Technology & Safety (‘IBTS’). While monthly data is what we need for the ‘Whole U.S. Housing Story’, annual MH production totals are compiled and reported, differently, by the Manufactured Housing Institute (‘MHI’) and the Manufactured Housing Association for Regulatory Reform (‘MHARR’). A published record of these annual MH producton totals, going back to 1955, is available in the SWAN SONG text, available via www.educatemhc.com
Modular & panelized (‘prefab’) housing monthly production is, at this time, tracked by no one! Why? These offsite construction units are built to local building codes and are next to impossible to research accurately. Some housing professionals, however, suggest this formula: 2% of seasonally-adjusted annual housing starts, per U.S. Census Bureau, reduced to a monthly average, e.g. 112,833 X .02. divided by 12 (months) = 2256+/- modular & panelized units.
Park Model RV production is tracked monthly and reported by the Recreational Vehicle Industry Association (‘RVIA’) via their online publication RVIA News – or simply google Park Model RV production. This category of offsite construction is included, as an increasing number of Park Model RVs, are used as permanent housing, particularly in Sunbelt regions.
Now for the ‘Whole U.S. Housing Story’ proper.
Format. First, the three categories of offsite construction and a subtotal of same, followed by U.S. Census Bureau estimate of single-family, site-built housing ‘starts’ for September 2024. Finally, a grand total of all categories together, but with the number of estimated number of modular & panelized units adjusted out, so as not to be counted twice.
- HUD-Code manufactured housing produced in September 2024: 8814
- Modular & panelized (‘prefab’) units estimated for September 2024 2256
- Park Model RVs produced during September 2024 294
- Offsite Construction subtotal for September 2024 11,364
- Census Bureau # of housing ‘starts’ during September 2024 112,833 *1
- (+) Offsite Construction subtotal for September 2024 +11,364
- Grand total of all U.S. Housing Starts during September 2024 124,197
- (-) 2256 Modular & panelized (‘prefab’) units in September 2024 = 121,941
Bottom Line: ‘Whole U.S. Housing Story’ for September 2024 is 121,941 new homes started. This compares favorably with the five year average of annual new housing starts in the U.S., at 1,448,620 units (five year average), which divided by 12 months = 120,718/month, just 1,223 units fewer than the 121,941 started during September 2024. This difference would begreaterif the 11,365 offsite construction units were not included, as they are, in the ‘Whole U.S. Housing Story’.
End Note.
- 1,354,000 X .02 divided by 12 = 112,833
Mfd. Hsng. Production Volume @ September 2024
IBTS reports 8,814 new HUD-Code homes produced during September 2024, down from 9,501 units produced during August 2024, but more than the 7,965 MHs produced during August 2023. And 13,784 floors were shipped during September 2024.
Year to date (‘YTD’) production? As of September 2024 = 77,376 new units produced compared to September 2023 & 66,647 new HUD-Code homes produced.
Value? Again, based on the decades old ‘per unit’ factor of $43,126/unit, September 2024 production is valued at $380 million; and, YTD at $3.36 billion. Once again, this is a gross undervaluation of new HUD-Code manufactured housing production! Imagine what our industry’s economic contribution would be to the national economy if we calculated more than production value, and included land lease community value factors as well
Stock Market Report for 5 November 2024
BRK-A Berkshire Hathaway, Inc. (Clayton Homes) $662 Down from Oct
SKY Skyline Champion Corporation $91.25 down from Oct
CVCO Cavco Industries $451.24 Up from Oct
LEGH Legacy Housing Corporation $25.58 Down from Oct
NOBH Nobility Homes $31.00 Down from Oct
ELS, Inc. Equity Lifestyle $69.34 Down from Oct
SUI, Inc. Sun Communities $130.96 Up from Oct
UMH, Inc. UMH Properties $18.42 Down from Oct
Flagship Communities $20.09 Up from Oct
MHPC, Inc. Manufactured Housing Properties $.62 No change
Manufactured Housing/land lease community Composite Stock Index (‘CSI’) @ 5 November 2024 = $838, up from 811 in October, well above the base $790 established in January 2022.
FHFA’s Manufactured House Price Index
Last month this blog announced the Federal Housing Finance Agency’s (‘FHFA’) new Manufactured Housing Price Index or MHPI. There has been no change in this report since first published on 9 October 2024. Again, FHFA’s MHPI:
“House price indexes for manufactured homes increased by 7.9 percent between second quarters of 2023 & 2024. They increased by 3.2 percent in the second quarter of 2024 compared with the first quarter.” And “In the second quarter of 2024, the median price of manufactured homes for sale was $231,000. This represents an increase of $1,000 from the second quarter of 2023.” Source: FHFA Manufactured Housing Price Index.
If the median price seems high to you, it’s likely because “The price indexes and median prices for manufactured homes are both based on data from real-property conventional mortgages acquired by Fannie Mae & Freddie Mac.”
Know what’s interesting about that? It’s obvious, little to no attention is being paid by the FHFA, as well as the two GSE’s, about the continued difficulty in obtaining favorable, affordable chattel capital (a.k.a. ‘home only’ loans) for new HUD-Code homes going onto rental homesites in land lease communities across the U.S. Is anyone out there listening?
NAHB/Wells Fargo Housing Opportunity Index
The National Association of Home Builders (‘NAHB’)/Wells Fargo Housing Opportunity Index (‘HOI’), for a given geographical area (i.e. local housing market) is defined as the share of homes sold therein that would have been affordable to a family earning the local median income, based on standard mortgage underwriting criteria. Hence there are two major components of HOI: income & housing cost.
“In all, only 37.7 percent of new and existing homes sold between the beginning of October 2023 and end of December were affordable to families earning the U.S. median income of $96,300. This is nearly identical to the 37.4 percent posted in the third quarter of last year, which was the lowest reading since NAHB began tracking affordability on a consistent basis in 2012.” Source: NAHB/Wells Fargo Housing Opportunity Index
Miscellaneous Notes from MHI & MHARR Reports
Following information quoted from MHI’s Monthly Economic Report:
“FEMA had 20 home shipments in September. FY2024 total was 163 homes (excluding adjustments).”
“Current Manufactured Home landscape includes 152 plants and 38 manufacturers. Two new plants opened, one in Mississippi and one in North Carolina.”
9.1% or 7.22%? “Manufactured Homes as % of single-family home starts: Manufactured Homes accounted for 9.1% of single-family home starts in Sep. 2024.” How is this calculated? If the number of single-family home starts was a seasonally adjusted 1,354,000 and 112,833 monthly, then 9.1% of 112,833 would be 10,268 units or 1,453 more than the 8814 new HUD-Code homes reported by the IBTS. Or another way of viewing this: 8814 monthly IBTS units divided by 121,941= 7.22 percent, and not the 9.1 percent reported by MHI.
Following information quoted from MHARR’s News Item dated 4 November 2024.
Top ten shipment states from January 2023 to date (September 2024):
Texas, Florida, NC, Alabama, SC, Louisiana, Georgia, Kentucky, Tennessee, Mississippi
George Allen