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

Economics

Jul 03, 2025

Consumer Confidence Retreats in June

After a strong rebound in May, consumer confidence resumed its downward trend in June. Consumers remain concerned about the economy and labor market amid ongoing uncertainty, especially around tariffs.

Sponsored Content

Jul 02, 2025

5 Proven Strategies Smart Builders Use to Grow in Any Market

Sound Capital has worked with builders across market cycles for over 20 years. They have seen who thrived when others pulled back, and they've studied the strategies they used to scale while competitors were sidelined. Here are five things they all had in common.

View all

Latest Economic News

Economics

Jul 03, 2025

Solid Job Growth in June

The U.S. labor market continued to show resilience in June, with steady job gains led by state/local government and health care sectors.

Economics

Jul 02, 2025

Two or More Story Home Starts Rebound in 2024

Over half of new single-family homes built in 2024 were two or more stories, according the recent release of the Census Bureau’s Survey of Construction (SOC). After declining in 2023, the share of homes started with two or more stories increased again in 2024, continuing the upward trend in place since 2020.

Economics

Jul 01, 2025

May Private Residential Construction Spending Dips

Private residential construction spending fell by 0.5% in May, marking the fifth straight month of decreases. This drop was primarily driven by reduced spending on single-family construction. Compared to a year ago, total spending was down 6.7%, as the housing sector continues to navigate the economic uncertainty stemming from ongoing tariff concerns and elevated mortgage rates.