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Demand for modular housing, or system-built housing, is expected to rise 5.2% annually through 2024, according analysis by The Freedonia Group. The Cleveland-based research organization projects demand for modular housing will reach 23,700 units in 2024.

Demand advances will be positively impacted by homeowner interest in modular housing, due to its perception as a high-end alternative to manufactured housing. Modular homes are built to local building codes and thus are more likely to offer modern features, such as enhanced energy efficiency. Modular homes are installed on foundations or slabs and are not designed to be moved after installation, an element that contributes to the high-end perception among homeowners.

Additionally, demand will be positively impacted because modular homes tend to be larger than manufactured units and more closely resemble site-built units while costing less than site-built homes. The increased use of small modular homes (accessory dwelling units or tiny homes) that can be used to alleviate local housing shortages is also predicted to be a positive factor on demand for modular.

The Freedonia Group projects shipments of modular homes will climb 5.3% annually to 23,300 units in 2024. Tiny-home production is predicted to see the fastest growth, albeit it from a low base, among types of modular housing because of the small size.