Pros, Cons, and Costs of Modular or Prefab Homes

Author: Construction Management


Buying a house costs a significant amount of money.

The median home price in the U.S. is around $245,000 as of this writing (via Zillow), so if you have to pony up 20% as a down payment, that’s about $40,000 in cash you need up front.

Considering that 29% of households have less than $1,000 in savings, and the average savings account balance is $17,750, it’s impressive how many people find a way into home ownership. But on the flip side, many are left out in the cold as a result of a financial barrier to entry.

Enter modular homes as a possible solution.

What is a modular home?

A modular home (also known as a prefabricated home) is entirely built in a factory, transported in parts, and assembled at the final construction site. The home looks like its traditional on-site developed counterparts but can be built and disassembled faster.

By purchasing a modular home instead of building one on-site, buyers can often get a new home sooner and cheaper. However, there are a few pros and cons you should consider before you decide whether modular is the way for you.

Pros and cons of modular homes


  • Portability: While modular buildings are generally built to be permanent structures, some designs can be disassembled so you can pick up and leave anytime you desire.
  • Quicker build: Since modular homes are built in a factory, unfavorable weather conditions don’t delay construction. Also, much of the assembly is already done, which cuts down the building time for the final construction.
  • Lower cost: Using conventional construction methods can cost $150 to $250 per square foot if you’re building a standard, non-luxury home. Modular construction can cost 10% to 20% less thanks to assembly line efficiency.


  • You can’t customize as much: While you have some customization options with modular buildings, most designs come with limits on alteration.
  • You need to be near the factory: To keep cost and effort under control, buyers should try to purchase a modular home from the closest factory/company to them. Otherwise, you could end up paying for extensive transport costs.
  • Zoning is an obstacle: Modular buildings are relatively new to the construction industry, and local zoning boards are still catching up. You may run into some outdated zoning rules that could derail the project or even prevent you from building altogether.


Want to read more including three key factors that determine the cost of modular homes? Read the full article here!

By Sarah Seavey
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