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Prefab Homes – Cost, Types, Pros & Cons


What are Prefab Homes?

The popularity of prefabricated housing among property buyers is increasing and this growth is expected to continue substantially over the next 10 years.

The term prefab home comes from the word prefabricated. It means that the house or building was built off-site. In other words, it is manufactured as opposed to being built onsite traditionally. This practice might sound new to most people but this was done ages ago during the 12th century.

Although done for centuries already, the approach did not flourish that much because of the manufacturing hindrances and acceptance from possible customers. Just like with other manufacturing practices, it would be difficult to deal with multiple designs to cater to more clients.

As with any manufacturers, getting the right design for the right customers can mean more overhead cost and many homeowners cannot accept this limitation. The onsite building offers such versatility thus it has remained as a top choice for homeowners globally.

These days, however, better manufacturing techniques and better machines to cater to complex jobs are available which affected the overall costs and versatility of prefab homes for the better. This made the overall manufacturing costs lower than before and getting better designs was also possible and that offered more choices for a wider range of consumers.

Which is better modular or prefab homes?

In a nutshell, prefab homes are an umbrella term for modular homes and panel homes. Although the terms are often used interchangeably their differences between the two. Often, prefab home points to panel homes. Panel homes and modular homes are often compared and homeowners try to know as much to come up with the best choice.

The main differences between modular and panel are on how they are designed and delivered. On one hand, panel homes are composed of parts like flooring, walls, and roofing. These components are called panels and these are delivered in flatbed trucks and stacked up onsite panel by panel. Being delivered through panels means you can have better choices on the width of your rooms and even the height. This also means it is less heavy to assemble.

Modular homes, on the other hand, are built like modules. Think of each part like a brick that you need to stack together. These are delivered in a box-like structure. These modules are then assembled with the help of a crane. Having a box-type structure carried through highways would mean that the overall width of the module does not exceed 16 feet and the length no longer than the truck itself. Traditionally, this means that you cannot have any room wider than 16 feet to achieve better structural integrity and manufacturing efficiency. However, the modern design approach had overcome this hurdle thus modular home offers better choices these days.

How are prefab homes built?

Because prefab homes are built offsite, the homeowners need to wait for the delivery of the panels of modules into their site. The time it takes for the parts to be made is dependent on the complexity of the requirements.

The first step is to specify your requirements. Often there is a standard design for each panel or modules but you can add some personal detail along. This will then be rendered by the manufacturer for your approval. If the design and specification are approved, then it will be put into the queue for production.

After manufacturing, this will then be delivered on your site. The manufactures will then assemble your home on your site in matter days or even hours depending on the complexity of the build.

How much does it cost for a prefab home?

In general, prefab homes cost less than traditionally built homes. It is estimated to be 30 to 40% cheaper. The estimated cost for an average home is around $125 to $150 per square feet. Prefab homes would account for around $70-$80. This may look impossible to most but this boils down to the overall cost of manufacturing.

Traditional homes would require the builder to buy the materials on their own.  Even if you buy these with discounts, it would not be enough to counter the number of discounts prefab home manufacturers can have with their bulk requirements. This alone can hugely cut costs.

Then there’s the labor. Unlike and average contractor which will have to gather manpower whenever there’s a project, manufacturers have regular employees that work by the hours and does only a few things in a manufacturing line. This allows building more with less time. This, in turn, allows for a better pricing scheme which benefits homeowners.

Then there’s efficiency. Manufacturers, in general, have lesser waste than on-site builders. The reason is that the excess materials from one panel can find a purpose unto the next which can be tricky to do with the conventional building approach. Take for instance a piece of leftover wood from one application. In a traditional approach, that would not fit the other parts. But for prefab manufacturers, this can still be used for the next panel as their assembling in bulk. Overall, this brings down the price for each panel you need.

Pros and Cons of prefab homes?


Installation Time

Building a home is not all that bright. Anticipation can get you anxious about it. On average, a regular one-story building can take 2 months or more to accomplish. And the bigger the building, the more time will be needed.

Prefab homes have an advantage over this as there are already available designs from manufacturers that can be delivered in just a few days or weeks. This greatly speeds up the process for two reasons – construction won’t be hampered by bad weather, and several different jobs can be done at one time, rather than tradespeople having to wait until one job is completed before they can do their work.

Wear and Tear

Other reasons for the increased preference towards prefabricated housing include its ability to withstand wear and tear, the possibility of a high sell-on value due to its consideration as real estate, and the flexibility for future renovation. In contrast, manufactured housing tends not to age well, may depreciate in value immediately and is very rigid in design, restricting the possibility of customisation.

Lower cost

As mentioned above prefab homes costs less than a traditional build. This is perfect for budget-conscious people. Also, this will help you get better amenities from that extra savings.


Although most of the prefab buildings are not transferrable after assembly, there some than can be disassembled and can be transferred to another are if needed. This means you can have the same house in a different lot. This is impossible with traditional houses.



This the main challenge for prefab homes. Bringing ready-made house components means transportation can be tedious and tricky. For that you have to make sure the manufacturer can deliver the goods on time as delivering the components can take longer and assembling your house with incomplete components can affect your expected completion time.


If you hire a contractor in building your house they will have to hook to utilities like water and electricity during construction. Prefab manufacturers however are just involved with the assembly of your home and nothing beyond that. You need to apply for the basic utilities by yourself.


There are some areas where you zoning for prefab homes re not well defined. This can bring out some technical problems. However, prefab buildings are getting more attention these days that authorities are catching up by having proper regulation structures in place.


Your contract with a prefab home manufacturer does not include buying a lot for your building. This means you have to look for the location yourself. And because logistics can be a challenge, choosing the right location can make or break your plans. Also, because more equipment is needed to set up a prefab home, some subdivision might not be as open to the option.

In a Nutshell

Overall though, prefab home is a viable option and should be considered by homeowners. There can challenges with this approach, yes. But if done right you can reap huge benefits from it. The level of customization that prefabricated housing permits, as well as the speed with which it can be constructed at a relatively low cost, makes it a sensible choice for anyone in the market for a new home.

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