Millennials watch mobile home market amid record housing prices

With house prices soaring, many buyers, especially newcomer millennials, are looking for more affordable housing. And that means taking another look at alternatives like mobile homes.

Yes, mobile homes often have a bad reputation. But their values ​​have grown faster than single-family homes, according to a recent report LendingTree Online Financial Services Marketplace. These homes have become even more attractive recently as they support the on-the-go and work-from-home lifestyle during the COVID-19 pandemic.

“Because the prices of single-family homes are so high, some middle-class buyers, especially younger ones, may increasingly turn to mobile homes,” says LendingTree’s senior economic analyst. Jacob Canal. “Even though the value of single-family homes is increasing very quickly, the lower price of mobile homes allows for an even faster rise. “

LendingTree compared the median prices of mobile homes and single-family homes in all states except Hawaii, using the most recent US Census Bureau data available between 2014 and 2019. Analysts found that while Mobile homes are much less expensive than single-family homes; their median values ​​have increased faster in 27 states than that of single-family homes over the same five-year period.

The median value of a mobile home was $ 53,300 and it appreciated 39% from 2014 to 2019, according to the report. That’s 6 percentage points higher than the median appreciation of single-family homes. And mobile homes are a fraction of the price, costing about $ 190,000 less than single family homes.

“Millennials are permanently excluded from the current real estate market,” says Jason dorsey, a generational expert at the Center for Generational Kinetics, who conducts market research on Millennials and Millennials.

These people may feel the fatigue of the auction war as they often argue and lose properties in today’s seller’s market.

“We’re seeing a lot of pressure on millennials to come up with even larger down payments as well as higher monthly mortgage and holding fees,” adds Dorsey.

The most affordable mobile homes are found in Nebraska, where the median home value is $ 21,800, appreciating 8% over the past five years. That is compared to a median of $ 172,700 for single-family homes in the state, where homes appreciate 29%.

Iowa had the second cheapest mobile homes, with median values ​​of $ 23,300 with an appreciation of 15%.

“Millennials are increasingly interested in mobile homes because it fits their remote or hybrid work lifestyle and potentially gives them more options for green space and geographic flexibility,” says Dorsey. “We expect this trend to continue as long as home prices remain high and hybrid or remote working continues to be an option.”