Homeowner’s Guide to Modular Construction

Modular construction isn't the slapdash building method of the past. Today's modular homes offer quality, flexibility, and time and cost savings.

Hearing the term “modular construction” may prompt many different reactions. For some, it harkens back to the visionary designs of the Atomic Age, when architects developed housing prototypes for the Jetsons-like future they envisioned. For others, it evokes cheap, prefab housing of the 1980s, when modular houses looked like one strong wind would carry them off, Wizard of Oz-style.

Suffice it to say, modular construction has come a long way. Today, modular homes come in every shape and size, including ultra-efficient tiny houses, affordable multi-family units, comfortable suburban homes and luxury homes with every bell and whistle. One thing is for sure — in most neighborhoods, you’d have a hard time identifying which homes are of modular construction and which were conventionally built.

What Is Modular Construction?

Modular construction is the term used when the parts of a building are constructed off-site. This distinguishes it from traditional or conventional construction, where a home or other building is built on-site from the ground up. “Once the main modules of a new home are constructed,” explains Devin Perry, executive director of business improvement programs at the National Association of Home Builders, “complete with attached walls, floor, ceiling, wiring, plumbing and interior fixtures, they are transported to the homeowner’s chosen lot and placed on a permanent foundation by a crane. Each home,” he adds, “is designed and constructed to meet all state and national building and fire codes, and a local builder does the final finish work.”

What Are the Benefits of Modular Construction?

While it was once associated with low-quality, affordable housing, modular construction is now very much mainstream, as home buyers realize its benefits, which can include lower costs, shorter construction time and a smaller environmental footprint. Some of the top benefits of modular homes include:

  • Money-saving. Depending on how much customization you do, a modular home can be between five and 20 percent cheaper to build than a conventional home. This is due to two main factors: material waste and labor costs. Because manufactured home components are assembled in large quantities, builders can order larger quantities of materials at a lower cost. There’s also far less construction waste, meaning the homeowner doesn’t pay for excess materials that wind up in the dumpster. And, because modular homes take less time to build, there are lower labor costs.
  • Time-saving. Because up to 90 percent of a modular home will be constructed off-site, Perry explains that a home can be built in a factory environment while the building site is simultaneously being prepped — instead of waiting for foundation and utility grid connections before the structure can start going up. He also explains because work is done in the factory, “weather delays, missing materials and subcontractor no-shows are all but eliminated, saving time and money.”
  • Eco-friendly. “Modular homes are green by their very nature,” says Perry. “Assembly in an enclosed indoor environment allows them to fulfill key components of green building certifications.” The reduction in construction waste is a big green plus, as well. It’s estimated that the average 2,000-square-foot home generates a stunning 8,000 pounds of waste. Manufactured homes, according to the Modular Home Builders’ Association, create about half that much waste. “Modular homes are often more tightly built and thus more energy-efficient,” says Perry, “which can result in lower heating and cooling costs for the homeowner.”

What Are the Disadvantages of Modular Construction?

While modern modular construction has evolved and improved in recent years, there are still some disadvantages compared to traditional construction. These include:

  • Limited customization. If your plan is to build your custom dream home from scratch, you may find that modulars offer less design flexibility than conventional homes. Modular home builders sell base models that are customizable to a degree. But just like “normal” homes, every custom aspect has a cost attached to it.
  • Zoning issues. Before you buy a plot of land and plan your perfect manufactured home to set down on it, make sure zoning regulations will allow it. In some deed-restricted neighborhoods, and sometimes in entire communities, the building of manufactured homes is not permitted.
  • Lingering bias. Even though the quality of modular construction has increased greatly, when it comes to resale value, many prospective home buyers and appraisers are still stuck in the 1980s. There’s a holdover bias that modular homes are less solidly built and less resistant to the elements. As modular home construction becomes more and more prevalent, however, this bias should dissipate.

How To Start a Modular Construction Project

Constructing a modular home is, in many ways, not that different from constructing a conventional home, in that you have options to choose from and decisions to make:

  • You may find a modular home builder who offers turnkey service, including the building lot, financing and all finish work.
  • You may find a modular home builder who provides everything but the lot, including financing, permits and all finish work.


  • You may find a modular home builder who just supplies the home, but functions as a project director and hires all subcontractors needed to prepare the lot and hand over a finished home.
  • You may find a modular home builder who just drops the finished pieces of the home on your prepared lot and hooks them up but does no other finishing work. The homeowner serves as de facto project manager and hires all subcontractors.
  • Perry says that some modular home manufacturers even sell do-it-yourself modular units for confident, skilled do-it-yourselfers. “Otherwise,” he says, “consumers are best served working with an experienced and licensed home builder.”

In these last three scenarios, securing a building lot and financing are the homeowner’s responsibility. If you locate a potential piece of land and are intent on building a modular home on it, make sure that local zoning allows the building of a modular home before you buy the land!

To get started on your modular construction project, check the Modular Home Builders’ Association (MHBA) directory for qualified contractors near you. The MHBA offers a consumer guide to modular home construction.

Elizabeth Heath
Elizabeth Heath is a travel, lifestyle and home improvement writer based in rural Umbria, Italy. Her work appears in The Washington Post, Travel + Leisure, Reader's Digest, TripSavvy and many other publications, and she is the author of several guidebooks. Liz's husband is a stonemason and together, they are passionate about the great outdoors, endless home improvement projects, their tween daughter and their dogs. She covers a variety of topics for Family Handyman and is always ready to test out a new pizza oven or fire pit.