Modular or Stick-Built Homes: Comparing Costs

As home construction labor and material costs continue to rise – and those costs are reflected in new home prices – affordable options in many markets can be slim pickings.

Enter modular homes. Once considered the red-headed stepchild of housing, these factory-built designs are enjoying new popularity as cost-effective, customizable, quality new home options. In the past five years alone, the modular or pre-fabricated housing market has grown by 8.5 percent, making it an $11 billion industry.

So just how much can a homebuyer expect to save by opting for a modular home compared to a stick-built house?

Modular Construction Estimates

“Typically, a modular home costs 10 to 20 percent less than a stick-built home, which is so called because it’s built out of sticks or lumber,” said Karen Gardner, who tracks and writes about real estate finance, in a recent article. “A conventional stick-built, non-luxury home costs about $150 to $250 per square foot. A modular home can range from $50 per square foot up to $250 for some luxury houses.”

As with any type of construction, costs are highly variable based on finish out and design. One expert estimates that an average modular home will cost in the range of $110 per square foot. But, add on designer finishes and upgrades, and your cost could be closer to $220 per foot.

Keep in mind that you’ll have other expenses such as the land cost, landscaping, site work, and utility set up, such as installing a well water system and/or septic tank.

Faster Construction Time

Because their pre-fab components are built in an enclosed, controlled environment, modular home construction isn’t affected by weather delays or delays in scheduling contractors. That means less construction time – and less cost. Plus, inspections are handled at the factory throughout the building process, another time-saver over scheduling inspections at a build site.

When the fabricated components are delivered to the property, wiring, insulation, plumbing, windows, and doors are already installed, minimizing the on-site finish work needed. A modular home can be ready to occupy in under four months, compared to six months or longer for a site-built home.

If you are looking for a more affordable new home option, or need to be in your new home quickly, a modular home could be a great option. Today’s manufacturers offer almost limitless options for styles, floor plans and finishes.