THE PAST FEW YEARS HAVEN'T BEEN kind to manufactured and modular home builders. But in the wake of Hurricane Katrina, they're in high demand. The American Red Cross estimates that the storm destroyed 275,000 homes on the Gulf Coast, and FEMA has asked the manufacturers to supply thousands of temporary housing units.

FEMA looked to the companies for similar help last year after four hurricanes blew through Florida. The industry estimates it provided some 4,000 or so temporary HUD-code homes in 2004. This year's situation dwarfs that experience: According to analysts' reports, FEMA has already ordered close to 5,000 new units and issued a request for proposals to provide as many as 18,000 more. (At press time, FEMAhad not yet awarded the contracts.)

Manufactured home builders have responded quickly to the requests. Several of the companies have plants and retail centers located throughout the Southeast, positioning them well to distribute their homes to the affected areas. FEMA worked with state transportation departments to waive some hauling rules, making it easier to move the units available in inventory.

The companies say they have enough capacity to meet the government's needs. David Roberson, president and CEO of Cavalier Homes, located in Addison, Ala., recently reported to Congress that the industry could build and deliver as many as 20,000 homes by December. Phyllis Knight, executive vice president and CFO of Auburn Hills, Mich.–based Champion Enterprises, says she told FEMA her company can build 250 or more homes a week. “There is a lot of capacity that's under-utilized right now,” she says. “We have some idle plant capacity that we'd be willing to turn back on.”

The demand for manufactured housing has driven the stock prices of the public companies higher, but analysts are unsure that the gain will hold. “It is essentially a one-time spike in demand,” Barbara Allen of Avondale Partners noted in a Sept. 9 report.

Modular builders may see a longer-term benefit. Homeowners who want to speed up the rebuilding process may turn to the quicker build a modular home offers. “We're going to have to build a lot of homes at a high level of volume, and our modular members are well positioned to help with that need,” says Thayer Long, assistant vice president for industry relations of the Manufactured Housing Institute, a trade group.



Total housing starts fell a bit off the pace in August, but they were buoyed by single-family starts that held nearly even against July's count. Multifamily starts were down 8.5%.


In the wake of Hurricane Katrina, panic buying drove framing lumber and panel prices sharply higher. The rate of price increases began to slow by late September.


The August drop in consumer sentiment was among the largest since 1978—and the survey was done before the effects of Hurricane Katrina were fully felt.


The West remains the regional winner, up 13.3% over July and 3.5% since August 2004. Starts in both the Northeast and Midwest are down year-over-year.


For the second straight month, existing-home prices outstripped the median new-home sales price. New-home prices are down 4% since July 2004.


Sales figures continued to climb toward another record-setting year, up 27.7% over July 2004. But the Midwest is down year-over-year.


Building permits for both single-family and multifamily projects slipped in August. Total permits are still 3.2% ahead of August 2004, however.


The builders' index fell for the third straight month in September. The reading reflects some post-Katrina concern and buyer resistance to high home prices.


Mortgage rates fell a bit in late August and early September as the economic markets sorted themselves out after Hurricane Katrina.