All industries have been affected by the pandemic in 2020, and the real estate market was no exception. Now that it’s 2023, let’s look back at how COVID impacted homeowners and how homeowners can find ways to start fresh and pursue purchasing a modular home with confidence.
1. Increased Lead Times
The most significant impact we’ve experienced as modular home manufacturers has been increased lead times—hands down. The reason goes back to the start of 2020 when we all realized we were facing a global pandemic and started scratching our heads about what this would do to the housing market.
The manufacturers' immediate response was to reduce overhead costs by cutting down materials and labor. In our world, it was forecasted that our pipeline (and many other manufacturers’) would suffer due to homebuyer shortage.
However, two things happened: our pipeline surprisingly skyrocketed, and the renovation sector bought a vast majority of the simple commodity products (such as oriented strand board or OSB) that we always have in stock.
The extended process of getting the materials we needed for producing modular homes meant longer production times and increased lead times for getting houses out the door. At Rochester, we’ll continue to rely on our experts and strong supplier relationships to help us adapt successfully to this new environment in 2023.
2. Increased Material Prices
Given the immediate reaction to the pandemic and supply decrease, we faced a drastic increase in commodity material prices. As a result, we had to start forecasting again—if materials were skyrocketing, how would this trickle down and affect the cost of producing modular homes? How would that impact homebuyers?
Between the lack of supply and the recovered incredible demand on the market in 2022 and 2023, we had to hope that increased prices on commodities and slightly higher home prices would not deter homebuyers from investing in the market.
3. Incredible Rate Market
Despite the slightly higher home prices, there was one saving grace in 2020: the incredible rate market. However, today, mortgage rates have risen. While we can’t predict anything at this point (we’ve learned from the last three years that anything can happen), we’re hopeful that the increase in interest rates speaks to a steady recovery of the housing market for the sake of homebuyers and the market. It could make the homebuyer count stay reasonably steady or even grow.
4. Housing Shortage
At this point, we’ve made it through rising material costs, slow production time, and slightly higher home prices—but we’ve come out the other end with an amazing interest rate market that enabled homeowners to bring their dreams to life.
Over the last several months, housing studies have popped up everywhere in hopes of staying on the pulse of the current and future housing market post-pandemic. Each study shows one major commonality: a housing shortage.
Even in smaller towns, there just aren’t enough homes for the number of homebuyers trickling into the market. This is an ongoing issue that we hope will begin to change in 2023 and beyond, and one that we hope to help alleviate with our business model and modular homes.
5. De-Urbanization and Work/Life Balance
Lastly, as a manufacturer in many rural cities across the midwestern U.S., we’ve seen the growing trend of de-urbanization. Now that people can successfully work off-site, in their homes, they’re starting to take control over the quality of their lives.
As a result, many potential homebuyers are looking to take their lives out of the city to raise their families, buy more affordable homes, and even retire.
Our Advice for New Homeowners
At Rochester, we can offer de-urbanizing homebuyers an affordable, customizable option in their chosen rural areas and make their dream come true–even post-pandemic. In particular, we’re experiencing an uptick in business for a few reasons:
- Rural projects are easier because there’s more space
- There’s more privacy and property for a family to grow
- Our homes are built in a climate-controlled environment
- There’s more versatility and options for convenience and customization
- People don’t have to worry about working with a ton of contractors
- With us, weather isn’t an issue during the building process
- We combat the housing shortage with our ability to consistently build homes
- We can negotiate lots and prices and buy materials in bigger quantities
- We can buy better and more consistently, so our suppliers respect that relationship and supply us first
That’s what modular home building brings to the table that many site builders cannot compete with. We’re here to support you and the market through whatever 2023 holds.
Build Your Dream Home Today
If you’re ready to design the home of your dreams, we’re here to answer your questions and guide you through the process. Contact us today to connect with local licensed building professionals who can give you more insight into the price.