Modular vs. Manufactured Homes: What’s the Difference?

So you want to build a new home — but you’ve got sticker shock. In researching cost-effective options, you may have discovered modular and manufactured homes.

These home types are typically more affordable than traditional new construction, known as “site-built” homes. The Manufactured Housing Institute reports that a manufactured home costs half as much per square foot as a site-built home. For modular builds, a 2017 study by the Terner Center for Housing Innovation at the University of California, Berkeley estimates construction savings of at least 20%.

Depending on land costs and the model you choose, a new manufactured or modular build might even cost less than the average existing home.

Modular and manufactured homes are both types of prefabricated, or “prefab,” homes. That means they’re built indoors at a factory, then transported to the building site. But just because they both start out in a factory doesn’t mean they’re the same thing.

Let’s explore the differences between these two home types.