10/27/2025
The path to homeownership hiding in plain sight
In your mind, what defines a “starter” home? A modest two-bedroom house with a yard and a manageable mortgage? Reality check: That home now costs over $1 million in most states, according to Realtor.com’s Allaire Conte. .
“Getting into one requires $250,000 for a down payment, a household income of nearly $225,000, and the ability to cover a $6,400 monthly mortgage,” she says. “It's no wonder first-time homebuyers made up a new historic low of just 24% of home sales in 2024,” she adds, citing the National Association of Realtors. .
But is there a middle ground that's been overlooked? Perhaps. Manufactured and modular homes are now shedding their outdated stigma and proving they can build wealth just as effectively as traditional homes. .
Hannah Jones, senior economic research analyst at Realtor.com, explains that many manufactured homes remain affordable in lower-cost markets while still experiencing strong price appreciation. According to the Urban Institute’s analysis of FHFA data from 2000 to 2024, appreciation rates of manufactured homes nearly matched those of site-built homes. And over the past decade, manufactured homes have actually outpaced traditional homes in appreciation. .
The key distinction is no longer whether a home was built in a factory. It's about the building code it follows, who owns the land, and how it's financed, says Conte. “Manufactured homes are built to federal HUD standards on a permanent steel chassis,” she says. “Modular homes follow the same state and local building codes as traditional houses. In other words, the end product is essentially the same. They’re just assembled differently.” .
Cost is where factory-built homes shine. While the National Association of Home Builders reports that the average new single-family home sold for more than $665,000 in 2024, factory-built homes cost a fraction of that, with construction timelines 2 to 4 times faster than traditional building methods. .
The caveat: manufactured homes on leased land typically appreciate less because land values have jumped — from 36% of total home value in 2012 to more than 57% in 2023, Conte reports. Simply put, buyers like to buy the land with the house, so those willing to buy one on rented land represent a smaller pool. This means that for manufactured homes to build equity effectively, they need to be titled as real property, which qualifies them for conventional, FHA, or VA financing. .
As long as affordable housing remains scarce and construction costs stay high, factory-built homes will continue offering a legitimate path to homeownership. For buyers planning to stay at least 5 years, these homes can build meaningful equity, serving as a stepping stone to future purchases — which is what “starter” homes were always meant to be.
Realtor, TBWS
