Contact: Tom Beers (703) 558-0649 or
tbeers@modularcouncil.org

Modular housing shipments grew in the first quarter at a rate of 4.9 percent, compared to the first quarter of 2004. In the fourth quarter of 2004, the year-over-year change was slightly higher at 8.2 percent, following four quarters of double-digit, year-over-year growth.

Currently, the National Modular Housing Council tracks shipments of modular homes in 22 states and areas with data collected by Hallahan Associates, Baltimore, MD. In the first quarter, shipments were up in 15 states and down in seven states, year-over-year. The majority of states which typically receive a large share of total modular production experienced growth in the first quarter. North Carolina, which accounted for 14 percent of all shipments, was up 6 percent over the first quarter of 2004; New York and Virginia were up 10 percent and 13 percent, respectively.

Other states with positive shipments growth included Florida (63 percent), Iowa (41 percent), Ohio (35 percent), Colorado (35 percent), Southern New England states (22 percent), Missouri (14 percent), South Carolina (23 percent), Minnesota (12 percent), Nebraska (12 percent), Northern New England states (11 percent), Georgia (4 percent), and Pennsylvania (2 percent).

Among the five states which comprise the largest shares of modular shipments, only Michigan experienced a year-over-year decline. This is somewhat surprising in that although the Michigan economy is among the weakest in the nation (Michigan is one of two states that experienced year-over-year job losses in the first quarter), both single- family housing starts and building permits were up in the first quarter, reflecting strong demand for housing.

Over the next few quarters, we should get a better idea whether this loss in the modular market share in Michigan is a trend or an anomaly.

Other states experiencing year-over-year first quarter losses included Illinois (-47 percent), Texas (-15 percent), Maryland/Delaware (-15 percent), Indiana (-14 percent), Wisconsin (-13 percent) and New Jersey (-9 percent).

Given the heat of the housing market, it may seem rather surprising that there were seven states which experienced year-over-year losses in modular housing shipments in the first quarter. The theory is that in the short-term, the share of modular housing in any particular state will fluctuate, and that typically, modular shipments will track the overall movement in the housing market.

It should be noted that NMHC’s modular housing estimates rely heavily on modular housing label programs at the state level. As such, this tends to be a forward-looking measurement, as the registration of modular-home labels typically indicates the home will be completed in the following months. In this way, statistics derived from modular home label programs are not unlike single-family building permit statistics on the site-built side. Indeed, when charted, NMHC’s estimates of modular shipments track very closely to single-family building permits. The chart also clearly exhibits the fact that recent growth rates in modular shipments have continually exceeded those of single-family permits, reflecting a growing market share.

The demand for modular housing will continue to be influenced by the same factors as is the demand for site-built housing (e.g., interest rates, employment growth). Over the next year, the anticipated net result of these factors is a cooler housing market. What does this mean for modular shipments? Expect the robust expansionary trend in modular housing shipments to continue as increases in market share will more than offset the effects of cooler housing market conditions.