Photo: mTwo Modular Home by haus.me
Today’s housing market is in a uniquely challenging place. There is a nationwide housing shortage, making it nearly impossible for today’s homebuyers to find a traditional house to buy and move into. Prices and competition are both through the roof while contractors deal with construction delays due to supply chain shortages of essentials like steel and lumber. It’s no wonder that young people today are looking into homeownership alternatives. Two of the leading options are tiny homes and building modular homes on fresh lots.
Both neatly side-step the current issues with home purchasing and new home construction while still offering the cozy satisfaction of owning a modern, eco-friendly home.
But which should you choose? Is a tiny home the right lifestyle and environment for you? Would you enjoy ordering a modular home to be assembled on your lot? What are the challenges or costs associated with each choice? That’s exactly what we’re diving into today.
Why Modular Home Building?
Modular homes are manufactured indoors in sections, then fit together into modern home designs. When complete, they appear like stick-built homes with classic or contemporary curbside style. They have all the right rooms, space, and features.The only difference is that the house was put together in modules off-site and assembled on your lot instead of being built (outdoors) from the ground up.
Modular homes once had a reputation for quick-build quality, but the industry has developed a long way in the last few decades. Now, a modular home is actually more likely to have high-quality work and perfect energy-efficiency due to the high standards implemented on the manufacturing floor. Modular homes are faster to build, comparable in price, and will not be delayed by lumber and steel shortages after work has already begun.
Benefits of Modular Homes
- Faster to build
- Greater energy efficiency
- Beautiful finishes and guaranteed final look
- Can be more affordable
- Available to build right now
Cons of Modular Homes
- Limited customization choice
- Lot acquisition
- Lingering bias in the real estate market
- Potential for financing challenges
Why Live In A Tiny House?
Tiny homes are a rising trend in the housing market, in which adventurous people endeavor to live in 800 square feet or less. Tiny homes are just that: tiny, but they pack a lot of life into a little frame. Through tiny house design, we have seen some incredible innovations in fold-away tables, drawers hidden in unexpected places, and multi-purpose furniture designs. If you like clever design more than spacious floorplans, a tiny house may be exactly your speed.
People who live in tiny homes are looking to minimize clutter and maximize joy. They may also be looking to minimize costs: tiny home utilities are also at a smaller size. Tiny houses can be built on smaller lots, and as additions to current family lots with extra yard space. They can even be mobilized on wheels.
There are two types of tiny homes, hand-built artisan masterpieces and elegant modern designer homes that can be delivered to your slab in a single module. Designer pre-fabricated tiny homes are currently rising in popularity with the housing shortage, as they can become welcoming homes in a very short period of time.
Benefits Of Tiny Homes
- Easy to build or place
- Fit on a small lot or as an ‘out building’ on an existing home lot
- Tidy life with clever storage and furniture designs
- Lower cost and lower utilities
- Available right now
- Converts well to guest house or vacation rental
Cons Of Tiny Homes
- Less spacious with minimal storage
- Limited room for a growing family
- Potential for financing challenges
What Modular And Tiny Homes Bring To Modern Homebuyers
We’ve talked about why modular and tiny homes might both be a good choice for your next home purchase. But why are these two housing types seeing a rise in popularity during the housing crisis? The answer is that they can provide new homes for homebuyers more quickly than stick-built homes can be built and even faster than you can get a seller to accept your bid on a currently listed home.
Once you buy a lot and pour the foundation, a modular or a premade tiny home can be delivered to your lot in a very short period of time. Depending on current supplies, you might see your home ready in just a few weeks, or with a few short months of assembly between you and homeownership.
Modular homes offer a full-sized experience for new homebuyers – you sacrifice nothing from stick-built design because modular home models have taken everything into account. In fact, modular homes are even more air-tight and eco-friendly as a result of the manufacturing process.
Tiny homes allow families to arrange for living space on smaller lots and shared lots where a full-sized house would not fit. You may choose an existing tiny home or have one delivered to your lot. When it comes to resolving the housing crisis with fast new abodes, tiny and modular homes are stepping up to the plate.
Shared Cons With Tiny And Modular Homes
Interestingly, the two types of homes seeking to resolve the housing crisis and home-building delays also share a similar downside: financing. Because neither type of home is considered “standard” in the mortgage industry, it can be difficult to get financing from typical sources to cover the construction or purchase of modular or tiny homes.
A modular home is not considered a typical type of home construction, and the mortgage industry is behind the curve on adapting to how common and desirable modular homes have become. This is also related to the stigma from the past (circa 1970) that modular homes are low-quality or are confused with mobile homes, which are not at all the same product.
Tiny homes, however, often fail to meet the minimum square-footage requirement for standard mortgages. When your house is less than 1000 square feet (many less than 800 or even 400), banks have a hard time taking the transaction as a serious home purchase.
This means you will need to find a specialized financing partner who understands that the “typical” mortgage and housing industry are floundering. The market needs quickly constructed high-quality homes, and there are financing institutes available who specialize in modular and tiny home loans.
If you are in the market for a new home and don’t want to wait on the bidding wars and construction delays, a modular or tiny home might be exactly the answer to your search.
Looking for more modular and tiny homes? Check out our full property listings as well for more info:
