Are Prefabs the Affordable and Sustainable Way to Own a Home?

Are Prefabs the Affordable and Sustainable Way to Own a Home? |

You need a house, pronto. You need a large, roomy and comfy place to live in, without having to deal with rent and annoying neighbors.

Fair enough. But there’s one problem: You can’t afford a traditional, site-built house.

Granted, you can take out a loan, but even loans can get pricey over time. So what’s a poor homeowner to do?

Answer: Consider prefabs.

What Prefabs Are

Also known as “modular”, “factory-built” and “system-built” homes, prefabs are built in factories on a section-by-section basis. Quality control teams check the sections every step of the way, before they’re wrapped as individual modules – hence the name “modular” – and transported to the home site. There, they’re assembled on a pre-made foundation, and completed by your local builder.

You can tell if a house is a prefab by the small metal tags on each section. These tags indicate the house’s manufacturing date, which you can also see on the electrical panel box. If you suspect that a house is a prefab, but can’t see any visible tags, check the house’s closets and cabinets for the distinct holes where the tags should be.

Prefabs vs. Manufactured/Mobile Homes

Although prefabs and manufactured homes look the same on the surface, they do have a number of key differences:

• Prefabs have pre-made foundations at their destination, and are as immovable as site-built houses, while manufactured homes are the opposite.

• Prefabs have to comply with the local, regional or state building codes at their destination, while manufactured homes only have to comply with HUD (a.k.a. federal building) codes.

• Prefabs are thoroughly checked and approved by building inspectors to ensure compliance with requirements, while manufactured homes are only checked – but not necessarily approved – by the inspectors.

• Prefabs increase in value over time like site-built houses, while manufactured houses decrease in value.

As you can see, prefabs are superior to manufactured/mobile homes in terms of quality. If quality is your priority when you’re choosing a home (and it should be, considering that a home is a long-term investment), choose a prefab.

Pros of Prefabs

Prefabs are becoming more and more popular, and for good reason:

• They’re more affordable than site-built houses, but they receive the same treatment in terms of insurance, taxes and home loans

• They’re faster to build. Prefabs take about 1 to 2 weeks in the factory, and another 2 to 4 weeks on the site. That means you can expect a fully built home in a little over a month.

• They’re easily customizable. A prefab home is better suited to accommodate any landscape design you were hoping to add, or even an outdoor kitchen if you live in a warmer area. (Zen garden anyone?)

They’re safer than manufactured homes, since there’s a stricter inspection of the premises.

• They’re energy-efficient, since they can shave up to 20 percent off your electricity bill.

Cons of Prefabs

On the other hand, the quality of a prefab is heavily dependent on the builder. If you want to know what you’re getting into, and get the most bang for your buck in the process, be sure to check a builder’s background, references and previous work before deciding to hire.

Also, the price is dependent on the style of house you want. You can’t ask for an elaborately designed home and expect to pay rock-bottom prices for it. As with everything else, you get what you pay for in the prefab market.

Is a Prefab Home for You?

If you want all the benefits of an on-site home, minus all the stress, then a prefab home is for you. Just make sure to do all the necessary research before you invest in one, and you’ll do just fine.


What budget-friendly options are you considering for your next home?


Anum Yoon runs her own personal finance blog over at Current on Currency. When she’s not writing about money management, she loves sharing stories about her travels. You can follow her on Twitter to catch her latest stream of ramblings.


7 thoughts on “Are Prefabs the Affordable and Sustainable Way to Own a Home?

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  1. Karen Newcombe

    Many of my clients are firms in the construction industry, and I got to tour a prefab manufacturer with one of them a few years ago. Super interesting, and I was impressed with the quality, which was actually higher than my site-built home from the early 1980s. Since the prefabs are shipped they need to be built well to hold together, so there are more nails, closer together than on a site-built home. They tend to be better sealed against weather and insects. I would actively seek out a prefab for my next home – unless I go tiny home, which is also extremely appealing.

    1. Anum

      Ooh yes, I agree that tiny homes are very appealing. I’m probably going to go with a prefab when I finally decide to purchase a house, because like you mentioned, they are extremely well built :)

  2. Raissomat

    We dream of both!!! Prefab&tiny.
    We are looking into small prefabs for quite a while, and we adore the idea. Only problem..this very moment in our country (CH) prices are crazy. Land is sold at 400$ the m2. So we could afford the land right now…or the house!
    We take it as a sign that something better (in sone form) will come up in the next years.
    P.S: looove prefabs!!

    1. Anum

      Prefab & tiny sounds like the perfect formula to an adorable yet functional house! I’m sure something better will come up for you once the prices settle down. Good luck!

  3. AT

    I’m in love with the new modular/prefab housing movement. You framed your article in site-built vs prefab, so you managed to escape what I’ve found to be the big question when it comes to pre-fab – the cost of the land and preparing it for building. That can cost double to triple the cost of the house itself! So while they look cool, pre-fab homes are not as affordable as they look on the websites due to the varying cost of site-planning.

  4. Tina

    This is my first time hearing about prefab homes. Does it promote sustainability? What are the ways in can be sustainable and what other customization are available? I’m really intrigued about this and I want to learn more, I’ll do my own research but it would be appreciated if someone could reply and give more insight. This really opened me to newer possibilities.

  5. Rvale

    Today is June 5th 2022. I have also done much research in prefabs and found the subject at hand very interesting.. finding the land and location may be the biggest challenge, but once you have found it choosing light steel prefab is the way to go but few people offer the service.


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