A Mid-Year Housing Outlook
Summer is typically a busy home buying and selling period, but as we head into August, the Federal Reserve has raised rates again to combat inflation. How will this most recent rate hike — the eleventh increase in 10 meetings of the central bank in 2022 and 2023 – affect home sales?
Real estate professionals see that the traditional housing market is starting to show signs of cooling. Site-built single-family home and condominium prices have dropped, particularly in overheated markets, but manufactured homes have remained a less expensive and more affordable option than site-built tract homes throughout the country.
In California, where traditional housing has historically been out of reach financially for many people, a huge demand remains for newly constructed homes. According to the California Association of Realtors®, at the end of 2022, only 17% of California households could afford the median-priced single-family home ($790,020). The lack of affordable housing is widespread and modern, new manufactured homes are a smart alternative for anyone from first-time homebuyers to busy young professionals and families, as well as retirees who desire a low-maintenance lifestyle.
While mortgage rates have increased, slightly cooling the traditional single-family home market, housing is still in high demand, not only making manufactured homes more popular than ever, but their values are increasing at unprecedented rates.
Manufactured homes are not only a more affordable housing option, but their values are increasing at unprecedented rates. According to real estate industry, news source Inman and a report done in late 2021 by Lending Tree, the values of mobile homes have increased at rates not seen in traditional single-family homes over the last few years.
The median price of a mobile home in California, for example, is $91,400, while the values increased by an average of 96% from 2014 to 2019, according to U.S. Census Bureau data. This increase is nearly twice as much as the average appreciation of 50% seen in the median value of single-family homes in the Golden State. Viewed another way, median-priced mobile homes in California cost $477,100 less than median-priced single-family homes ($790,020), which shows both affordability and an increase in appreciation over time.
Today’s manufactured homes are also loaded with features typically seen in site-built homes. Stone countertops, farmhouse kitchen sinks, on-trend cabinetry and lighting, and other touches such as optional porches and attached garages, have elevated today’s manufactured homes and add to the ever-increasing price values.
If you think homeownership is out of reach, contact HomeQuest to learn more about manufactured housing options throughout California, and how to purchase your ideal home.