Prefabricated Homes: Advantages and Disadvantages

Prefabricated Homes: Advantages and Disadvantages

Medieval Norman poet Robert Wace made the first recorded mention of prefabricated structures in the French magazine Historia 1160 to 1170. He described the transportation and construction of a castle in an apparent kit form. India also saw the utilization of movable structures during the 16th century under Emperor Akbar The Great.

Mail-order kit homes made from wood also became popular in North America. The Sears Catalog Homes was one of the first companies that sold these commodities through print publication between 1902 and 1910. The Forest Products Laboratory division of the United States Forest Service conducted a comprehensive research concerning prefabricated homes beginning in the 1930s and continuing until the 1960s.

About 10 percent of new residential dwellings in the U.S. in 1958 were prefabricated. In the United Kingdom, there were more than 156,000 prefabricated residential structures built from 1945 to 1948. The German company Sell-Fertighaus GmbH also built over 5000 similar structures in Germany to house occupying American forces after World War II.

Nonetheless, prefabricated homes or prefabs now represent a type of prefabricated buildings. They can be described as premade or manufactured off-site in advance and transported and assembled on-site. Several modern designs also take design cues from postmodernism or futurist architecture. Others have promoted the use of these dwellings in accordance with advocacies related to sustainable living or preference toward a minimalist lifestyle.

Prefab Pros: Advantages of Prefabricated Homes

Cost-Effective or Inexpensive

The concept of constructing buildings and other structures using prefabricated materials and building sections draws inspiration from the mass production and mass consumption models of the modern industrial economy. Nevertheless, one of the advantages of prefabricated homes is that they are considerably inexpensive.

Note that utilizing prefabs in construction is more inexpensive to implement than constructing structures on-site and from the ground up by an average of 10 to 30 percent. This is because modular structures and actual manufactured or mobile homes are produced by companies that take advantage of economies of scale. Achieving this scale allows a producer to mass-produce a commodity at a lower cost to capitalize further on mass consumption.

Reduces Construction Time

Another advantage of prefabs is that utilizing them can significantly reduce construction time. Imagine an individual or family buying a lot to build a home. Traditional construction would take 6 months to a year depending on the total floor area, exterior and interior design considerations, and the availability of financial resources.

The same family would be able to build their home using modular home structures and sections in 6 to 18 weeks. The entire construction timeline would be reduced to 6 weeks or less if they purchase manufactured or mobile homes and place them on the already-existing land area. Of course, the length of time would still depend on design preferences, availability of the prefabricated materials or structures, and shipment considerations.

Availability of Options

Prefab homes can represent different types of options and configurations available to consumers. Based on the standards in the United States, there are three options: modular homes, manufactured homes, and mobile or trailer homes. Modular homes are manufactured as sections or components of an entire home such as external walls and interior panels.

Manufactured homes are entire dwelling units produced off-sites and placed on the lot. Trailer homes are similar to manufactured homes but they are readily movable by vehicles. Tiny homes with wheels fall under the trailer home category. Note that in Australia, manufactured homes are also called prefabricated homes or relocatable homes.

Prefabs are also flexible. An individual can continuously expand his or her home using modular sections or prebuilt units. These homes can also be disassembled when needs and preferences change. The disassembled components can be refurbished. Considering the cost advantage of its initial implementation, renovation using prefabs is inherently inexpensive.

Low-Cost Housing Programs

Remember that low cost and reduced construction time are two of the major advantages of prefab homes. Furthermore, in consideration of the availability of options, implementing prefabs can support low-cost but high-quality government housing projects. The Office of Policy Development and Research of the U.S. Department of Housing and Urban Development supports the use of factory-built housing to resolve challenges to housing affordability.

The use of prefabs can benefit low-income individuals and families who do not have their own residential properties due to their cost advantage. In addition, in situations that require immediate housing solutions, such as in the case of calamity-stricken communities, prefabs can provide a quick but permanent solution to normalize the lives of affected community members.

Potentially Eco-Friendly

An emerging benefit of prefabricated homes is their possible alignment with ongoing appeals and movement toward environmental sustainability. Implementing prefabs reduces wastes, pollution, and disturbances compared to on-site construction. The amount of energy used in installing and assembling prefab components is lesser than on-site construction.

These prefab components or structures can also take advantage of upcycling and the entire prefab implementation can utilize regenerative design, thus supporting a circular economic model. Several architects and designers have incorporated the use of green materials, as well as other considerations such as energy efficiency and recyclability.

Furthermore, the controlled environment in manufacturing prefabs also means that the use of raw materials can be maximized through accurate designs and measurements. A study conducted by the UK-based circular economy expert group WRAP revealed that a 90 percent reduction in materials can be achieved through modular construction.

Other Advantages of Prefabs

Below are the other advantages of prefabricated homes:

• Servicing of Remote Locations: On-site construction in remote locations or areas located from far cities can benefit from opting to implement prefab homes. Prefabricated structures and components are readily transportable and their assembly requires fewer human resources than traditional construction.

• Quality of Materials: Prefab structures and components from reputable manufacturers are screened for quality control. These companies are also regulated. In addition, because they are manufactured indoors and within controlled facilities, materials are free from weather-induced environmental damages compared to on-site construction.

• Return on Investment: Similar to the cost advantage mentioned above, developers or construction companies can benefit from using prefabs because of reduced human resource and supervision requirements, as well as a reduction in construction time, which ultimately translates to lower financial implications.

Prefab Cons: Disadvantages of Prefabricated Homes

Issues for High-Density Areas

Another disadvantage of prefabricated homes is the limit to which they could be utilized. Implementing them in areas with a high population density is not suitable because they still consume a considerable portion of land areas similar to single-dwelling houses constructed from the ground up. Note that most prefab homes are intended for a limited number of dwellers.

However, it is also worth mentioning that several high-reside building projects use prefabricated materials, including structures, components, and full-size units. In the Changsha City in the Hunan Province of China, a Chinese developer constructed a 10-story building in 28 hours and 45 minutes using prefabrication.

But large-scale structures require the utilization of high-quality materials and considerations such as the structural integrity of an entire assembly. The structure of smaller prefab homes or specific prefab components should be reviewed when considering expansion.

Limitations in Design Options

Ready-to-sell prefabs are manufactured in consideration of uniformity. These include similarities in sizes or dimensions, as well as placements of details such as window and door slots. The pre-built nature of modular structures and full-sized manufactured units might not appeal to some individuals and architects because of design limitations.

Of course, there are prefab manufacturers that offer customized or bespoke designs following the preferences of their customers. However, these arrangements can run counterproductive to the cost advantage of ready-to-sell prefabs. It is important to note that customization does not readily follow established mass production processes.

Note that manufactured homes are also smaller and have limited options fo customizations and expansions when compared to modular homes. It is important to consider the differences between these two when choosing a prefab route for home construction.

Payment and Financing Considerations

Another disadvantage of prefabricated homes is some issues and limitations in payment and financing. Note that some banks and financial institutions might not provide loans for construction projects involving modular homes and manufactured homes. Trailer homes are often financed through special lenders. These issues might be a problem for families or individuals who want to build their houses using mortgaged money.

Several instanced might also result in more up-front payment. Failing to secure a loan from a bank would mean that an individual would need to pay modular structures or the entire manufactured home based on its overall market price. Similar to building a house from scratch and on-site, building one using prefabs also has up-front payments that include labor and project costs unlike buying an existing home at a 20 percent down payment.

Improving Manufacturing Further

There is an emerging industry centered on prefabricated homes. The United States has been one of the forefronts. However, a 2020 Forbes article by Jennifer Castenson noted that regulation restrictions and manufacturing issues have compelled industry players to determine processes and actions needed to make their operations more effective, efficient, and competitive, especially when compared to manufacturers from other countries.

While it is true that prefab homes are inexpensive to implement than traditional construction, the entire cost can be improved further without sacrificing built quality, designs, and adherence to regulation. There is still room for improvements on the side of manufacturers. These improvements can make prefabs more cost-efficient and attractive to consumers.


  • Castenson, J. 2020. “Prefab Needs To Be Fixed Before It Can Save Housing.” Forbes. Available online
  • Ganiron, T. U. 2016. “Development and Efficiency of Prefabricated Building Components.” International Journal of Smart Home. 10(6): 85-94. DOI: 14257/ijsh.2016.10.6.10
  • Office of Policy Development and Research. 2020. “Factory-Built Housing for Affordability, Efficiency, and Resilience.” Evidence Matters. Office of Policy Development and Research, U.S. Department of Housing and Urban Development. Available online
  • Sabarwal, H. 2021. “Chinese Developer Builds 10-Stored Building in Changsha in Just Over 28 Hours.” Hindustan Times. Available online
  • 2007. Current Practices and Future Potentials in Modern Methods of Construction. WRAP. Available via PDF