MHC Sector Strong Despite Headwinds: Northmarq

Softening is here, but manufactured housing continues to grow across the U.S.

Generic Image of a manufactured home

Image by Nick Night, via

Despite a sluggish start, 2022 ended on a positive note for both supply and demand metrics in the manufactured housing sector, a recent Northmarq report shows. Even with the fourth quarter being slower in terms of deliveries and investment activity, the U.S. manufactured housing market had a strong year. The average occupancy rate increased each quarter, ending the year at 94.4 percent.

In terms of rent growth, the manufactured housing sector outperformed conventional multifamily in 2022. Average rents for MHCs rose 6.7 percent year-over-year, 50 basis points above multifamily rent growth. The South was the priciest, with average rents hitting $595. Within the region, Florida ($621) was the most expensive despite the consistent shipments of new manufactured housing. By comparison, the average rent in the Midwest was only $483.

READ ALSO: Overcoming Misconceptions About Manufactured Housing Communities

With demand for MHCs on the rise mainly due to the deepening affordability crisis across the country, shipments accelerated, with 112,900 mobile homes delivered in 2022, a 6.7 percent year-over-year expansion. Even with a slow end of the year, all U.S. regions saw increased shipment numbers, with the South accounting for the greatest volume of new inventory—45,000 units. Of those, some 20,000 units were shipped to Texas and 9,000 to Florida.

Don Vedeen, Vice President for National Manufactured Housing Investment Sales, Northmarq. Image courtesy of Northmarq

The Northmarq report also found that the national occupancy rate in manufactured housing properties recorded a 40-basis-point increase in 2022. In the South, demand was so high that the Florida occupancy rate, for example, hit 96.2 percent. Meanwhile, the Midwest saw a 90-basis-point annual improvement.

Mirroring trends in other real estate sectors, MHC sales velocity slowed down last year. The U.S. investment volume inched higher each year between 2017 and 2021, only to decline in 2022 by 33 percent. Investor demand remained strong in states including California, Arizona, Nevada, Illinois, Indiana, Florida and Texas.

“Although there is still an incredible appetite for MHC acquisitions in the market, we are still seeing a delta between what sellers are willing to accept versus what buyers can offer,” Don Vedeen, vice president for national manufactured housing investment sales with Northmarq, told Multi-Housing News. “The return metrics have been severely affected by the increase in interest rates.”

What to expect from manufactured housing in 2023

Going forward, as the economy continues to recalibrate, Vedeen expects total shipment volumes for 2023 to come closer to the average levels seen between 2018 and 2020, meaning some 95,000 units will likely be delivered this year.

“The drop will be more associated with a slowing pace of economic growth and new household formation in 2023… But the factors that support demand for manufactured housing—specifically the elevated costs of rental and for-sale housing—are expected to remain in place throughout the remainder of this year,” Vedeen noted.

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