Forward-thinking builders have long sought ways to improve the traditional stick-built, on-site process. Enter prefab, whose most recent iterations offer the latest in quality control, speedy delivery, innovative materials, and sustainability—a long way from its early 1900s roots of Sears, Roebuck & Co. mail order.

Prefab has undergone fits and starts. Resistance has come in a litany of perceptions, from inferior quality that conjures visions of mobile homes to the belief that standardized designs leave little or no room for customization to fear that workers’ jobs will be axed. But Frank Baker pushes back. Thirty years ago, after working for General Motors, Baker started a company that makes SIPs for prefab houses and then founded Insulspan in Blissfield, Mich.

“The challenge is that a prefab house requires greater advance planning since you can’t make decisions on the fly on a building site,” Baker says. “You need to be much better disciplined ahead of time.” But the upside, he adds, is that once that’s done, it’s far easier to execute the house. In addition, jobs aren’t lost, just moved inside the factory.

“For years we’ve been saying that nobody would think to build a car on a driveway, so why would builders construct a house that way?” asks Donna Peak, executive director, Building Systems Council of the NAHB.

Newer prefab construction techniques use precut parts, panelized members, concrete forms, and modules. Yet the number of U.S. homes assembled this way remains small—about 2 percent of the country’s new single-family housing starts, according to the U.S. Department of Commerce. Buyers are attracted by a host of reasons, such as competitive initial prices helped by government and utility incentives and policies for renewable energy, and by lower operating expenses resulting from a tighter envelope. Some favor how factory assembly reduces waste, impacts the environment less, and causes fewer construction delays. Others like the dramatic design creativity—even circular homes, which manufacturer Deltec Homes produces. Buyers of Lake|Flato’s modular Porch House designs have found three prime reasons appealing: quality, attractiveness, and consistency, says architect Ted Flato, who adds, “Every site deserves a different arrangement of rooms and outdoor spaces, which are equally important.”

Prefab may represent the future, but it’s important to be realistic about the target homeowner market. If you’re new to the category—or are contemplating a deeper dive—understand that no single prefab option represents a one-size-fits-all, budget solution for everyone. Yet with so many options available, Baker sees no buying segment that couldn’t be satisfied as long as you do your homework on which product works best.

Boston architect J.B. Clancy, a principal at Albert, Righter & Tittmann Architects, has worked on modular houses and agrees. He adds two other prefab pluses: A certain amount of risk is removed from the building process, and it’s easier to keep to a budget because the fixed costs are upfront rather than during on-site construction.

The following examples may help you decide if getting into prefab is right for you.

Project: Art House, Charlotte, Vt.

Construction method: Modular

Pros: A tight envelope in a harsh climate; a shortened construction schedule; and customized options are available.

Cons: More organization is required before breaking ground; module size is limited and depends on state transportation requirements.

Time frame, order to delivery: About six months (built with volunteers, this house took eight months).

Energy Smarts: Triple-glazed windows (few are north-facing); solar thermal system for hot water; heat-recovery ventilation (HRV) system; Energy Star appliances, compact fluorescents, and LEDs; high levels of insulation and air-tight construction.

Size: 1,250 square feet

Cost: Market rate would be $175 to $200 per square foot or $240,000 to $275,000, minus donated materials, labor, and land.

Teamwork can yield innovative results, as shown by architect J.B. Clancy of Albert, Righter & Tittmann Architects, energy analyst Peter Schneider of Efficiency Vermont, and Green Mountain Habitat for Humanity. With help from modular builder Preferred Building Systems, the result was Vermont’s first certified Passive House and Habitat’s first such home in the U.S. “There aren’t many modular builders constructing high-performance homes in the Northeast, one of the harshest environments, so this became a challenge worth pursuing,” Schneider says. “We also wanted to demonstrate that the quality can be as good as custom, stick-built, but at lesser cost due to the modules.” The design uses 6 inches of rigid foam insulation on outside walls, 5 ½ inches of cellulose on inside walls, and ½-inch sheathing for a total of 12 inches—double the average of a modular or site-built home, Clancy says. To fit the Vermont vernacular, Clancy replicated a farmhouse. “It didn’t need to wear its greenness on its sleeve,” he says. Modular cost projections exceeded the typical Habitat budget, so $50,000 was raised through a grant from Vermont Community Foundation’s High Meadows Fund. Preferred Building Systems has since built seven such homes in New England; this one sold 30 days after completion.

Project: Sea Breeze Cottage, Tampa, Fla.

Construction method: Modular

Pros: Modules are built in a controlled environment to protect materials from elements, eliminating weather delays. Factory process allows for more inspections than stick-built construction.

Cons: Modular builders often work within a limited radius to minimize transportation costs and carbon footprint.

Time frame, order to delivery: 2 weeks average

Construction time on site: About a month

Energy Smarts: Tankless water heater; closed cell spray foam insulation; Energy Star appliances; ceiling fans; CFLs

Size: 2,679 square feet

Cost: $321,600

Modular construction represents the prefab industry’s largest segment, says Tom Hardiman, executive director of the Modular Building Systems Association. Module sizes vary based on needs, customization, and state transportation restrictions. One company adapting to market conditions is Nationwide Homes, a 54-year-old manufacturer that makes modules as wide as 16 feet and long as 76 feet. The company developed Sea Breeze Cottage. Among the two-story home’s main efficiencies is a 15 SEER heat pump that heats and cools through air ducts sealed to reduce leakage. Photovoltaic solar cells were integrated into asphalt roof shingles and don’t require wiring. Direct-vent fireplaces cut drafts and heat loss. Almost 30 feet wide, the design features a front porch, peaked roof, and good cross ventilation. Because of Nationwide’s large-scale purchasing power—it has built more than 36,000 homes—it produced the cottage for $55 a square foot. “It cost more than a production home, but less than most custom, stick-built houses,” says Donald Aheron, vice president of engineering and the designer in charge. In the future, Nationwide hopes to standardize energy-efficient options as it continues to emphasize efficiencies with those costs soaring.

Project: Lakeside Green, Lakeside, Ohio

Construction method: SIPs, ICFs, and heavy timber-framing

Pros: Tight envelope. When supplied ready-to-assemble, panelized houses can be erected more quickly than traditional on-site houses and with smaller, less skilled crews. They can be used with modular designs to build traditional or contemporary homes.

Cons: SIPs are more expensive upfront than stick-built parts, but cheaper when all costs are included to meet Model Energy Codes.

Time frame, order to delivery: 6-8 weeks at most

Construction time on site: 7-10 days average for the shell

Energy Smarts: ICFs; foam insulation under slab floors; low-E coated, argon-filled windows

Size: 1,652 square feet

Cost: About $289,100

When a tree fell on Frank and Brenda Baker’s 1900 summer cottage, the couple decided to build a high-performing replica for year-round enjoyment. The Bakers had good product to work with. More than 30 years ago, Frank started Insulspan, a company that produces SIPs. His goal was to build better, faster, and with less on-site waste. Initially, the SIPs were used as curtain walls on timber-frame homes, but over time, with help from CAD and CAM programs, Insulspan improved the panels and the time it takes to make them. Baker knew the concept would take time to catch on with builders, but now thousands work with SIPs. There’s even a Structural Insulated Panel Association, which estimates that up to 10,000 homes per year are built this way. For Lakeside Green, the Bakers hired designer Dennis Feltner, who was familiar with SIPs as well as the area’s architectural review board’s requirements. White cedar was harvested from within a 250-mile radius for siding, and the original heart pine floors and plumbing fixtures were reused.

Learn more about markets featured in this article: Orlando, FL, Olympia, WA.