How Prefab Houses Work

The history of prefab houses dates back to the early 1900s when companies like Sears offered housing kits. See more pictures of home design.

Manufactured houses often get a bad rep. There's nothing like getting stuck behind a truck hauling half a house to get the jokes rolling. And "trailer-trash" is part of the modern vocabulary. However, just as Starbucks redefined coffee and "Who Wants to be a Millionaire" redefined game shows, "prefab" modules are redefining assembly-line houses. Those who favor them tout benefits like smaller price tags, better construction, increased environmental benefits and quicker move-in times. Prefabs are growing in size, too. They're no longer two-room cottages without indoor plumbing; modular houses can grow to thousands of square feet with multiple stories and basements. The prefab industry is expected to top $10 billion in 2007, according to Plus, since Hurricane Katrina, prefab houses have gotten a boost as more attractive and sturdier alternatives to FEMA trailers.

­The assembly of a prefab house is based on the same concept as that of a car. Just as Henry T. Ford's production method for the Model T made cars affordable for the average consumer, assembly-line production and bulk buying drive down the cost and construction time for prefabricated homes. Prefabricated homes have evolved over the years and now come in many varieties and with lots of extras. Just as you can add a satellite radio or heated seats to your car, you can add hot tubs and crown molding to your modular home. Welcome to the world of prefab.­


But what exactly is a prefab house? How are the pieces constructed and assembled? How much money does it take to get a house on a plot of land? And what kind of instructional manual comes with the ultimate model kit?

­In this article, we'll find out what prefabricated houses are all about.

History of Prefab Houses

Mario Tama/Getty Images








Next, we'll learn a­bout the prefab modern homes.


Modern Prefab Houses

Modern prefab homes are intended to blend high-end design elements with affordability.
Photo courtesy

Although the concept of modern prefab design has been around since the '60s, the architectural movement didn't take off until early 2000. As technological advances like SIP panels (structural insulating that is precut and can be locked together) were made and interest in residential architectural design blossomed, architects turned their attention to prefab houses. The goal was to create a home that could be transported to a building site, be easily erected and look like modern architecture -- all within a reasonable budget.

To further stoke the flames of interest, Dwell magazine held a modern prefab invitational in 2003 to create an economical prefab home that could be mass-produced. Allison Arieff, the former editor of Dwell, had written the 2002 book "Prefab," which profiled modern prefab prototypes. Nathan Wieler and Ingrid Tung contacted Arieff with the hopes of obtaining more information about how to build a modern prefab home. Instead, Arieff asked the couple if they'd be interested in using their land in Pittsboro, N.C., as the site for a design competition. With an initial construction budget of $200,000, the couple agreed and soon was helping the magazine create the criteria for the home and judging designs [source: Boston Globe].

The Dwell invitational created an opportunity to take the modern prefab concept and make it a reality, with the goal of introducing mass-produced prefab homes with architectural modern flair to the market. However, challenges remained. The architectural firm Resolution: 4 Architecture delivered the design, but the project went $50,000 over budget, resulting in the reduction of the home's footprint in order to stay within budget [source: Dwell].

The cost of a modern prefab home remains the chief complaint today, with the average modern prefab home running about $175 to $250 per square foot [source: BusinessWeek]. In fact, Dwell magazine is now offering modern prefab homes through their company Empyrean. Proponents of the movement point out that although many of the products available cost as much as, if not more than, stick-built homes, homeowners can save money in design and construction costs. Many architect-designed homes exceed $300 per square foot, not including design fees [source: The New Yorker] . After all, you're not paying for one-of-a-kind architecture. The architect is reselling the design, and even if modifications are needed, those costs are usually small.

When it comes to mass-producing affordable modern prefab homes, Rocio Romero is one of the most recognized architects. Romero's company, located in Perryville, Mo., creates flat-packed cubelike houses with sleek, modern exteriors. House kits range from $23,650 to $45,255 [source: Rocio Romero]. Finishes and amenities also impact the price. Romero uses a series of interlocking panels for ease of building construction. The company also sends a videotape along with instructions for the general contractor or the handy homeowner who goes it alone.

While some prefabs qualify as "traditional homes" to mortgage companies because they use some of the methods of stick-built homes, others do not. But many new modern prefabs are being introduced to home-builders. The Swedish company, IKEA, introduced its modern prefab home, the BoKlok, to the European market. In 2006, the Walker Art Museum presented an exhibit around modern prefab, "Some Assembly Required: Contemporary Prefabricated Houses." And as the market demands more environment- and wallet-friendly housing choices, the modern prefab market should continue to grow in the scope of its offerings.

In the next section, we'll learn about the different types of traditional prefab houses.­

Types of Prefab Houses

This manufactured home was built on a steel frame and will eventually sit on a permanent foundation.
© Photographer: Lecajun | Agency: Dreamstime

"Prefabricated housing" is an umbrella term that covers manufactured and modular homes.


Modular housing, on the other hand, is considered manufactured housing's higher-class sibling and is associated more with the "prefab" trend. Modular homes consist of units or modules that are constructed in factories and joined together on site; they often use costlier materials and are bigger than manufactured homes. Plus, modular housing offers many more customization options, including pricey upgrades like granite countertops and personal touches like antique tile flooring. In fact, many upscale module houses are pricier than site-built (also known as stick-built) houses after owners add the desired details and upgrades. Modular housing must conform to the home site's state, local and regional building codes -- which go above and beyond HUD Code restrictions. The houses are transported on reusable carriers and are classified as real estate once they're placed. Modular homes do not use steel frames; similar to stick-built homes, they are constructed using wooden beams with steel posts for support. The framework, as well as the fact that modules can be stacked and reorganized, allows for multiple stories and basements.



Ordering a prefab home sounds like a cinch, but what other costs need to be factored in? We'll find out them on the next page.

Prefab Housing Cost

Buyers can expect to pay 10 to 25 percent less for a prefab house than for a &quot;stick-built&quot; one.
Buyers can expect to pay 10 to 25 percent less for a prefab house than for a "stick-built" one.
© Photographer: Mbogacz | Agency: Dreamstime

Buyers can typically expect to pay less for a prefab home than they would for stick-built construction. Modular homes do offer pricey customization, but the material costs still decrease with assembly-line construction.

Because prefab home parts like windows and walls are made uniformly, there is no need for skilled workers to manufacture parts individually, which drives down costs. Also, factories, unlike most individual tradesmen, can buy the supplies in bulk. Prefabricated houses are constructed indoors and away from the weather, which also reduces delays and subsequent costs. Prefabricated houses, like stick-built homes, do not have fixed prices, so buyers can negotiate. In general, they can expect to pay 10 to 25 percent less for prefabricated houses over stick-built construction.

Typically, land is the biggest cash outlay for a prefabricated house. And, depending on your skill level, construction could be the other big expense.

People who ordered Sears, Roebuck and Co. homes in the 1900s usually possessed carpentry skills, but most modern homeowners wouldn't feel comfortable laying their own foundation. There are other regulations for building, including zoning restrictions, survey requirements and electrical and water hookups. Some companies offer their own services -- for an extra fee, of course.

Once buyers have the land and the house they want, financing can be a hurdle. Manufactured homes aren't considered real estate until they are permanently installed, so it can be more difficult to get financing for them. Even then, manufactured homes can depreciate in value, so lenders are less likely to give out loans.

Modular homes, however, do not suffer as much from this lower-quality stigma, so financing for them is more similar to that for stick-built houses.

Prefab House Construction

Workers cover the walls of a FEMA manufactured home in 2005.
Workers cover the walls of a FEMA manufactured home in 2005.
David McNew/Getty Images

Prefab houses are constructed from the inside out. They are manufactured in the following order in a couple of days or less, with inspections following each step (the process can take longer if the buyer has customized the home):

  1. The floors are assembled first. There is usually a wood frame under the floor for attachment of wall panels.
  2. Wall panels are attached next with bolts and nails. Panels are insulated and windows cut out before the panels are attached.
  3. Once the house structure is in place, the plumbing, electrical wiring and drywall (including the ceiling) are installed.
  4. The roof, typically constructed in another part of the factory, is set on top of the walls. In some prefabs, workers attach the roof on-site after the rest of the house is constructed.
  5. Exterior and interior finishes are added, including siding, cabinets, vanities and backsplashes. The walls are also painted.

Once the housing units are constructed, they need to get to the owner's land. The transportation of the modules is limited by roadways, overhangs and power lines. The builders have to scout out all these factors before delivery, but in general each unit must be less than 16 feet wide, 60 feet long and 11 feet high. Because travel can be unpredictable, buyers are usually on site with independent contractors to inspect the units for scrapes and cracks.

The house has to have someplace to sit, so a foundation is required. Before the home arrives, homeowners must have the land excavated and have a foundation in place. The foundation can be poured concrete, concrete blocks, basements or crawl spaces.

The house arrives and is placed by crane on the foundation. Workers use heavy-duty cables to move the units, which come together at points called marriage walls. The marriage walls tie the house together and ensure that it is level and properly bolted together. At this point, the roof is placed if it was not factory-installed. A hinged roof, also made in the factory, is unfolded onto the house. The entire delivery and placement of the house can usually be completed in about a day. After that, decks, staircases and extras can be installed.

Variables such as customization, financing and factory schedules can contribute to the process, but from choosing the house to completion, most manufacturers give a timeframe of a few months. ­

On the next page we'll learn about prefab-home trends in the United States and around the world.

Prefab Around the Globe

A prefab home on Block Island, R.I., circa 1967
A prefab home on Block Island, R.I., circa 1967
John G. Zimmerman/Time Life Pictures/Getty Images

In the United States, the Northeast has been the biggest adopter of modern prefab because of the area's lack of land, shorter building season and higher cost of labor. Because of environmental advances (see sidebar) and the high cost of real estate, California has also become a player in the prefab market. Since Hurricane Katrina and the housing slump, the South has also increased its number of prefabricated houses. Many of these are low-cost housing, but some manufacturers have added environmental benefits, like energy efficiency, which increases their value. Plus, these prefabricated houses get positive reviews for aesthetics, durability -- including wind rating of a 150 mph -- and price over the infamous FEMA trailers.

European countries have embraced prefab housing because of land constraints. Companies in England and Germany use cranes to set modular units atop pre-existing buildings. In Sweden, hip home furnisher Ikea has expanded into the homebuilding business. Appealing to a workforce that cannot afford to live in the higher-priced cities, Ikea has sold thousands of its Live Smart ("BoKlok") apartments.

In space-deprived Japan, car maker Toyota has expanded into home-building. Just as its auto assembly plants have gotten a reputation for efficiency, so have its modular housing production centers. And because the housing is made under the strict confines of its factories, Toyota can market it as durable and sturdy enough to endure earthquakes, which are common in Japan.

For more information on prefab housing and related topics, check out the links on the next page.

Related HowStuffWorks Articles

More Great Links


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