Can Modular Housing Help Address the Housing Affordability Crisis?

Committees and Councils
Published

Two of the benefits frequently touted for off-site construction are its speed and efficiency. By using less time and less waste, industry professionals estimate it can save 10% to 15% on construction projects.

This seems like a natural fit for producing more affordable housing options for prospective home owners, but off-site construction may not always be at the forefront of builders' minds. So how can it be more widely adopted to help address the nation's housing affordability crisis?

Eric Holt, assistant professor at the University of Denver, and his team have been exploring how off-site construction fits into affordable housing. Using a HELP Grant from the National Housing Endowment, the team specifically planned to look at how framing methodologies tie into affordable housing and modular housing.

"We initially were going to watch framers put up houses using the different methodologies, but the timing of that was in March as everything fell apart," Holt noted. So instead, the team analyzed data from other sources — including NAHB, the Structural Insulated Panel Association (SIPA) and suppliers in the pre-cut market — to compile a report on the role modular and panelized construction can play in affordable housing.

Holt will present the findings of this report during a Building Systems Week webinar, titled "The Impact of Modular & Panelized Construction on Affordable Housing," on Wednesday, Sept. 23, at 2 p.m. ET.

He will also share the work his team has been doing to create a home builder's guide to off-site construction to help builders navigate the switch from stick-built homes to buildings systems.

"Research shows that you can become more efficient, faster, with off-site construction, and even potentially save money," Holt observed. "But it requires a cultural shift within the company, the supply chain and even the business model."

Design, in particular, can be challenging, Holt noted, as not everything from a stick-built environment necessarily translates to off-site construction. Labor is still a challenge in the factory, too, but companies such as Entekra — a Building Systems Council member and 2020 Construction & Design Winner of the Ivory Prize, which focuses on scalable solutions to housing affordability — are looking to close that divide through the use of technology.

"There's a direct correlation between the cost of something and the lack of productivity," Gerry McCaughey, CEO of Entekra, noted for the Ivory Prize awards as the primary cause of escalating home prices. "There is so little technology being utilized inside the construction industry despite the fact that we're now in 2020. And yet the technology exists to build a house before it's ever built, which is what we do."

Holt questioned if a more production, technology-oriented mindset could help builders understand the value of off-site construction, and how it can benefit their business and productivity. He looks forward to receiving webinar participants' feedback to help inform future research.

"We really do want the industry's feedback on this and what next questions do we need to answer for the industry," Holt shared. "What are the other challenges they're experiencing out there? Why aren't they moving to offsite construction? Is it a stigma about modular getting confused with manufactured housing, or a supply issue?"

Register today to reserve your seat. Visit nahb.org for more information on Building Systems Week.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Education | Remodeling

May 02, 2025

How to Diversify Your Remodeling Business for Growth

To celebrate National Home Remodeling Month, NAHB will host two Shop Talks, sponsored by Westlake Royal Building Products, to help remodelers diversify their business and build greener.

Sponsored Content

May 02, 2025

Home Builders: How to Scale Your Projects to Sustain Profitable Growth

Too many builders still feel like they’re grinding. They build a few homes at a time, reinvest their profits, and hope the next project pays off a little more than the last. It doesn’t have to be that way. The builders who scale create lasting wealth. And the key to faster scaling is smarter financing.

View all

Latest Economic News

Economics

May 01, 2025

Housing’s Share of the Economy Grows Higher to Start the Year

Housing’s share of the economy grew to 16.4% in the first quarter of 2025, according to the advance estimate of GDP produced by the Bureau of Economic Analysis. This is the highest reading since the third quarter of 2022 and is up 0.2 percentage points from the fourth quarter of 2024.

Economics

Apr 30, 2025

U.S. Economy Contracted in First Quarter of 2025

The U.S. economy contracted in the first quarter of 2025 for the first time in three years, driven by a sharp surge in pre-tariff imports, softening consumer spending, and a decline in government spending.

Economics

Apr 30, 2025

House Sharing is Not Just for Young Adults

A record-high 6.8 million households shared their housing with unrelated housemates, roommates or boarders in 2023. While college-age and young adults make up the largest subset of house sharers (close to 41%), this type of living arrangement is gaining popularity among older householders fastest, with the 55+ segment accounting for 30% of all house-sharing households in 2023.