We’ve been hearing more about off-site construction, especially in light of the industry’s skilled trade deficit. But what do home builders plan to do about it in the coming years?
A recent Home Innovation survey reveals the pace of transition from on-site to off-site construction is picking up. We also found the competition among various off-site housing solutions will not likely be “winner take all.” Rather, it looks like several different solutions have their own followings and will be able to grow.
In April, Home Innovation conducted a survey of 300 U.S. home builders. We included seven off-site construction practices and asked builders about their anticipated use of each in the coming year. In December, we repeated the survey to gauge change in builder sentiment; we also included a new question to gauge builders’ anticipated use of off-site systems in five years.
During the eight-month period between surveys, roof trusses continued to be the top choice for builders adopting an off-site system. About 70% of respondents in both surveys said they would continue to use roof trusses. In April, 17% of respondents stated they would increase their use of trusses in the coming year, while only 11% stated the same in December. While this was a decline, it was not enough to drop trusses from the top spot among off-site building options.
The two categories that saw the greatest increase from April to December were open wall panels and closed wall panels, where double the number of builders stated they planned to increase their usage of these systems.
Plans for the Future
A majority of builders in the December survey expect to be using roof trusses both in the coming year and in five years. Little increase between the usage expectations makes sense because roof trusses have a mature market.
Over 40% of builders surveyed plan to use precut framing packages, where most structural components in floors and walls are cut to precise measurements and assembled at the jobsite. Unlike the first two systems, we observed a 6-point increase between one- and five-year use expectations, indicating builder thinking seems to favor this option.
Similarly, open wall and floor panels finished at 34% and 29%, respectively, for anticipated five-year usage—a 7-point increase over the one-year expectation for both. Closed wall panels also fared well at 22%, with builders anticipating five-year usage 7 percentage points ahead of the coming year usage.
Further Data Analysis
Ed Hudson, Home Innovation’s director of market research, believes open wall and floor panels are going to be on the front edge of this market increase, using the existing widespread network of shops and factories around the U.S. They are a less radical change for builders than some of the other options. However, he also believes as capacity ramps up in closed wall panel systems, this form of off-site construction will see a similarly dramatic upswing.
There are additional opportunities in this space for modular and precast concrete, says Hudson. The industry is already familiar with modular, and capacity and technology exist to support its growth. Precast concrete panels, however, are used less often for above-grade structures in the U.S. and will need more time to gain footing in the market.
While not part of these surveys, manufactured housing shows evidence of resurgence with a high upside potential, especially considering demographic changes that favor younger buyers, rising housing costs, and design improvements within the manufactured housing sector.
For more details from these surveys, visit HomeInnovation.com/Trends.
