Census data shows modular construction made up just 1% of US single family completions in 2025, down from 4% in the late 1990s. The detail inside those numbers shows exactly where factory building works and where it keeps hitting a wall.

Factory built housing has been America’s next big thing for decades. The latest Census data shows how far it still has to go. Of the roughly one million single family homes completed in the United States in 2025, about 14,000 were modular.

That is 1%. It is also why the American modular story is worth a closer look. The numbers show not just how small the sector is, but exactly where it works and where it does not.

What counts as modular in the United States

The Census Bureau defines a modular home as one where finished three dimensional sections of the dwelling are built in a factory, transported to the site and joined together on a permanent foundation. Panelised construction is different. There, wall panels, roof trusses and other components are made in a factory and assembled on site.

Both sit inside the official new residential construction statistics. Manufactured homes, built to the federal HUD code, are counted separately and excluded from those figures.

Modular, panelised and manufactured

In US statistics, a modular home is built in finished three dimensional sections in a factory and joined on a permanent foundation on site. A panelised home is assembled on site from factory made wall panels, trusses and components. A manufactured home is built entirely in a factory to the federal HUD code and is tracked separately from new residential construction.

Modular’s share of US housing has shrunk, not grown

According to Census data on construction methods, of the 1,005,000 single family homes completed in 2025, 975,000 (97%) were site built. Modular accounted for 14,000 (1%), and panelised and precut homes a further 16,000 (2%). The Census Bureau notes the modular estimate carries a relative standard error of 17%, so it is a guide rather than a precise count.

The longer view is more striking. Through the 1990s, modular made up 3% to 4% of single family completions, including 44,000 homes in 1998. Since 2018, its share has sat at 1%.

Despite decades of attention, the factory built share of American detached housing is smaller now than it was a generation ago.

Modular works in custom homes, not spec estates

The detail inside the numbers is where the useful insight sits. In 2025, modular made up 6% of homes built by contractors on the owner’s land (8,000 of 130,000) but less than 0.5% of homes built for sale (3,000 of 721,000).

In other words, American modular is largely a custom home product. It is chosen by owners commissioning a single house, not by volume builders delivering estates of spec homes.

That pattern fits the argument that modular factories live or die on their order books. A factory needs a steady, predictable flow of work to cover its fixed costs, which is why Canada is testing whether a government can order its way to a modular industry. The US data suggests that without that kind of guaranteed volume, modular finds its niche one custom client at a time.

The factory built home is not replacing the building site. It is carving out the parts of the market where the maths works.

Geography matters too. Modular made up 5% of completions in the Northeast and 3% in the Midwest, but only 1% in the South and the West. The strongest shares are in the colder regions, where shorter outdoor building seasons make the case for moving work indoors easiest to see.

What the factory actually offers

The National Association of Home Builders describes modular as a system in which nearly 90% of a home can be built off site. It says weather delays, missing materials and subcontractor no shows are all but eliminated in the factory, and that a typical modular house can be ready to move into in about three months.

Quality control is layered. NAHB notes that every system built home is inspected by an independent third party before it leaves the factory, then checked again by a local building inspector once it is on site.

The other advantage is parallel work. Site preparation and foundations can proceed while the house is being built in the factory, rather than one after the other.

Manufactured housing shows factory scale is possible

Manufactured housing is a separate market with separate rules, but it proves American factories can produce homes at volume. The Manufactured Housing Survey, sponsored by the Department of Housing and Urban Development, recorded 102,700 manufactured home shipments in 2025.

Census shipment data shows 8,500 units shipped in July 2026, a seasonally adjusted annual rate of 106,000. Across January to July 2026, shipments totalled 58,900, about 5% below the same months of 2025.

The average sales price of a new manufactured home was US$134,800 in April 2026, up from US$124,800 a year earlier. Single section homes averaged US$84,600 and double section homes US$164,000. Price data runs about four months behind shipments because dealers are surveyed after the homes are shipped.

The constraints sit outside the factory walls

If factories can build at volume, why has modular not taken a bigger share of single family housing? The answer sits largely outside the factory.

Transport limits how big a module can be and how far it can travel economically. Local codes, planning rules and inspection regimes vary from place to place. Site conditions still need a builder on the ground. Finance can be harder to arrange when much of the value is built before it reaches the block. And volume builders already have established site based supply chains and trade networks.

Labour could shift that balance. With Associated Builders and Contractors estimating the US industry needs to attract 349,000 net new workers in 2026, moving repetitive work into a controlled environment becomes more attractive. A factory crew does not lose days to rain, and a smaller site crew can install and finish a home that arrives largely complete.

A hybrid model, not a takeover

The American data does not point to a factory takeover. It points to a hybrid industry in which some homes, some components and some regions lean on off site production while the site built house remains dominant.

The factory built home is not replacing the building site. It is carving out the parts of the market where the maths works: custom homes, colder regions and affordable manufactured housing.

For modular to move beyond 1%, it will need what the rest of the world’s factory built sector keeps running into: steady volume, finance that understands the product, and rules that treat a house built indoors the same as one built outdoors.

THE GOOD BUILDER TAKE

Modular has been sold as the answer to housing supply for so long that the actual numbers come as a shock. One in a hundred. The more useful takeaway is where that one percent sits: custom builds on owners’ land, in regions with short building seasons. Factory building wins where it solves a specific problem for a specific client. It struggles where it has to compete head on with a site based model that volume builders have spent decades refining.

Frequently asked questions

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Last updated 28 September 2026. Figures reflect the latest official releases available at that date.

General Information Only: This article provides general information only and does not constitute legal, financial, tax or professional advice. It does not take into account your particular circumstances. Figures and policy details are drawn from official sources current at the date of publication and may change. You should seek independent professional advice before acting on any information in this article.

Author: TGB Editorial