In 2020 and 2021, the housing market was driven by a whirlwind of competing factors: supply chain challenges driving up the costs of materials, worker shortages slowing home production, stimulus checks providing many would-be homebuyers a boost to their down payment funds, and historically low interest rates making homeownership more attainable for more borrowers.
According to Fannie Mae’s March 2022 Economic & Housing Outlook, while the supply chain and worker shortage issues that constrained housing supply over the past two years will likely continue to improve, rising interest rates and, to a lesser extent, inflationary pressures will prove to be challenges for many homebuyers. The end result is a market where home sales are expected to decline, and home prices are expected to appreciate at a slower rate in 2022 and 2023.
As the marketplace “returns to a new normal,” homebuilders and community developers may face different, more familiar challenges in the future. Containing the costs of building a home can help offset the impacts of increased interest rates, keeping homeownership accessible while helping maintain profit margins as appreciation slows. Faster development times can also help defray overhead costs, going from a plot of land to a family moving into their new home quickly. Gateway American Resources is addressing these challenges head-on by incorporating manufactured homes into its new Colorado subdivision.
Coming to Fruition: Site- and Factory-Built Homes Create Inclusive Neighborhood
Building in Weld County, Colorado, the Fruition subdivision will be a 3,500-acre master-planned community in the town of Keensburg that will offer homebuyers a mix of site-built and factory-built options. The team will offer as many as 2,500 factory-built homes in the community, with the first phase of development already underway.
While each of the manufactured homes in Fruition will represent an estimated $65,000 savings compared with site-built homes, it is also important to maintain the homes’ appeal to consumers. With a focus on homes that are eligible for MH Advantage financing, Gateway American Resources has sought a level of curb appeal, building materials, and interior finishes that are consistent with the site-built homes and consumer expectations. These homes are built to Department of Housing and Urban Development code and are eligible for MH Advantage financing, which is comparable with site-built financing, meaning there won’t be any surprises when they visit a mortgage lender.
Gateway American Resources is one of many developers who see the advancements in factory-built housing. They are realizing the potential these developments bring to grow their business in an environment where the cost reduction and the speed of construction, compared with site-built housing, are main driving forces that could offset an impact of rising interest rates.
Learn about the benefits factory-built housing can bring to your next subdivision project at FannieMae.com/MHAsubdivisions.
