Site Builders Lennar-DR Horton Go for HUD Code Market Price Point-New Conventional Single-Family Houses $100k-200k Mimic Single Section Manufactured Homes and Tiny Houses–Facts-Video-Analysis
A HUD Code manufactured home builder suggested that MHProNews spotlight a move in recent years by conventional single-family housing builder Lennar to build smaller site built houses that compete with manufactured housing in price. As this report will reflect, D.R. Horton has made a similar move. This was a topic MHProNews had already marked for a possible article a few months ago, and thanks to that added nudge by a well-known and respected manufactured home industry professional, this article will review some of the headlines and insights from Lennar’s and D.R. Horton’s literally groundbreaking initiatives. “Offerings at Elm Trails include Lennar’s Cooley model, which comes in at an even 350 square feet, and their Henley model at a curiously specific 661 square feet, per KSAT on 4.21.2023. “Perhaps what is most striking about the products, however, is their prices. A Cooley home at Elm Trails is listed on Lennar’s website for a cool $131,000 — a price point that faded from the San Antonio market for newly built stick-and-frame homes.” “It’s just amazing. These houses are on 20-foot lots, which is essentially unheard of in most major markets,” said Keith Hughes, business development director with Zonda, a housing analytics firm. “It’s a new thing.” “One of the core ways that builders drive down home prices is through lot sizes, specifically lot width,” he said. “They pay less for the land, so they can charge less for it.”
Part I
MHProNews notes that several individuals and media outlets have covered this and other similar projects by Lennar.
Affordable housing creates interest and “buzz.”
The specific tip that the HUD Code builder provided was for a tiny conventional housing project in Norman, OK that similarly had single-section style conventional single-family housing. So, this isn’t just a Texas phenomenon.
D.R. Horton
It isn’t just Lennar that testing these waters. A video posted earlier by D.R. Horton this year brags:
We FOUND The CHEAPEST Homes In Houston Texas!
On 9.8.2024 the stats on this video per YouTube: “669K views4 months ago MARIE VILLAGE BY D.R. HORTON.”
Per the D.R. Horton YouTube page is the following. Their largest model was said to be $207,000 and is called “turnkey,” meaning that like a manufactured home, it comes with appliances and basic window coverings.
If you are looking for the cheapest homes in the entire Houston Texas area, we have found them! There is one neighborhood that is selling homes like candy because of their insanely low prices. And the great news is that this neighborhood is in a nice growing area. Located on the east side of Conroe, TX this neighborhood has homes starting at $137k. The builder is offering to pay closing costs, and their lender has down payment assistance programs. These are brand new construction homes and offer a home warranty. This community is about 28 minutes from downtown Conroe, TX. We grocery stores located about 10 minutes away, this is a very convenient and cost effective housing option. Monthly payments on some of these homes are as low as $1100 per month with as little as 3.5% down.
Sales are brisk, per the builder’s promotional video above. Their largest model shown in the video is about 1200 square feet, so roughly the size of a 16′ x 84′ (15.33′ x 80’=1226.4) single section manufactured home.
Part II – Additional Information with More MHProNews Analysis and Commentary in Brief
1) Many know the maxim, “Nature abhors a vacuum.” When conventional housing is getting less and less affordable, it should be no surprise that at least some conventional builders would try out concepts like those shown in this article.
2) As a tip to users of artificial intelligence, it helps to have some idea of what the answer is or should be before asking a question from a platform like left-leaning Google’s Gemini or left-leaning Microsoft Bing’s Copilot. Both Google and Bing put disclaimers on their AI systems that explain that responses should be double checked. To keep this article as focused as possible, we will limit our Q&A with AI to this inquiry in order to illustrate this point. This move to smaller site-built houses on smaller lots that often mimic a single-section manufactured home look and price points are not just a Lennar or D.R. Horton phenomenon. It is being tested by multiple companies that operate in numbers of states.
That said, consider this Q&A by MHProNews with Gemini.
Lennar and D.R. Horton have in the past couple of years launched projects in Texas and Oklahoma that offered dramatically smaller single family conventional or ‘site built’ housing at price points from the lower $100k range to about $207,000. How widespread is this effort? Are other single-family conventional site builders going after the smaller house-smaller lot price point in order to keep new housing sales up? Facts examples and links are valued.
Here’s an overview of the trend towards smaller, more affordable single-family homes in Texas and Oklahoma, with examples and links:
Lennar and D.R. Horton’s Initiatives:
Texas: Both Lennar and D.R. Horton have been actively building smaller homes in various Texas markets. For example, Lennar’s “Next Gen” series offers homes with attached suites for multigenerational living, while D.R. Horton has introduced smaller floor plans and communities targeting first-time homebuyers.
1. Products and Services – Next Gen – The Home Within A Home – Lennar
Oklahoma: In Oklahoma, Lennar has launched several communities with homes priced in the $100k range, featuring smaller square footage and lot sizes. D.R. Horton has also expanded its offerings to include more affordable options in the state.
Other Builders Following Suit:
Pulte Homes: Pulte has introduced its “Life Next” series, focusing on smaller, more efficient homes with flexible floor plans.
Taylor Morrison: Taylor Morrison has been building smaller homes in certain markets, targeting buyers seeking affordability and lower maintenance costs.
Highland Homes: Highland Homes has expanded its offerings to include smaller homes in various Texas markets, catering to first-time homebuyers and those looking for a more compact lifestyle.
Factors Driving the Trend:
Rising Housing Costs: The increasing cost of land and construction materials has made larger homes less affordable for many buyers.
1. Material Costs Affect Housing Affordability – National Association of Home Builders
Shifting Demographics: The growing number of millennials and first-time homebuyers are seeking smaller, more manageable homes.
Remote Work: The rise of remote work has allowed many people to downsize and relocate to more affordable areas.
While the trend towards smaller, more affordable homes is gaining momentum in Texas and Oklahoma, its widespread adoption may vary depending on local market conditions, land availability, and buyer preferences. However, the growing number of builders offering smaller home options suggests that this trend is likely to continue in the coming years. …”
3) Lennar and D.R. Horton don’t necessarily have a great reputation for quality. See the videos and a prior report posted below. Note that the first video was posted on PissedConsumer, a consumer interest and reviews site that MHLivingNews has featured multiple times with reports and reviews like these linked.
D.R. Horton
MHLivingNews also previously published a report comparing the benefits that manufactured home sellers could tout by having consumer protection safeguards built in thanks to the Manufactured Housing Improvement Act of 2000. Dispute resolution is one of those consumer safeguards that manufactured home buyers have access to, but more costly conventional house buyers routinely would not. Meaning, neither the goal nor the takeaway of this report is not to foster panic among front-line sellers of manufactured homes.
Rather the goal of this report in part is to foster yet another manufactured home industry reality check. As we have demonstrated through years of third-party backed research and reports, our manufactured home industry should be multiple times its current size, because the needs for affordable housing are so great. Indeed, the industry was before, and could be again, several times its current size.
That said, on the one hand, there are sound arguments that industry pros can and should make when confronted with a prospective customer that says they are shopping one of these small and cheap entry level conventional houses. But it would also be foolish to ignore the risks and threats that this trend and others pose for the HUD Code manufactured home industry. And let’s be clear, the Manufactured Housing Institute (MHI) has no apparent public alarm notices equivalent to this one for MHVille pros. Nor is the behavior of MHI such that it is lifting a proverbial finger to prepare the industry for what lies ahead.
4) MHProNews has been steadily sounding the alarm for industry pros that a range of potential competitors are pushing towards the price points of the manufactured home market. Let’s be candid. Even though a manufactured home demonstrably can appreciate like a conventional house, or sometimes faster, and a manufactured home buyer routinely has better consumer protection than some lower-end conventional builders may offer, which way are many under-informed housing buyers likely going to go? Years of misinformation have been allowed to fester by MHI.
MHI’s own commissioned studies have said what is necessary. Bruce Savage, MHI’s former VP of communications, said that the industry could ‘unleash potential sales’ through a properly executed campaign, based on the Roper Report to MHI.
MHI award winners – take note of that pattern on the MHI website and what it may mean for you and your firm. You may be here today and suddenly gone as the latest MHI “unperson” tomorrow, like those on that list above.
5) Kevin Clayton said that the manufactured industry was ready for a GoRVing style marketing campaign. These facts raise numerous issues for the industry, investors, public officials, and affordable housing advocates, not just for MHI members. Recall this flashback previously reported by MHProNews and see how it applies to this topic. It is from a video interview previously reported by MHLivingNews and MHProNews (see link below for transcript and the video).
6) Now, pivot back to those Lennar and D.R. Horton conventional site-built houses. Their houses are per those reports often touted as ready to move in. So, the ‘advantage’ that manufactured housing offers of ‘faster’ build times may not matter to a customer willing to take ownership of a move-in ready model.
7) Manufactured Housing Institute (MHI) leaders need to be held accountable for their problematic behavior through much of the 21st century. By accident or design, they have arguably contributed to this housing crisis. Those corporate and/or association leaders are among those who are ‘dumping’ stocks in their own companies.
Let’s be clear. There are other publicly traded HUD Code firms where insiders are selling stocks. These are not the only ones.
8) Independents in manufactured housing are being steadily pushed/lured into being bought out by one of the MHI ‘big three’ on the production/retail side or also on the communities side. Per AI supported fact-checks, others in MHVille – MHI itself and their loose network of bloggers and allied trade publishers – have been revealed multiple times as failing to do what they claim. They have apparently used false, misleading, deceptive, and posturing-without performing methods and tactics to get and keep members in line, while consolidation more-or-less steadily occurs.
9) While MHI’s ‘leaders’ have been pushing the ridiculous ‘CrossMods’ tale for approaching a decade, despite its obvious market failures, conventional housing builders are swooping in and are hitting lower price points that compete with mainstream manufactured homes. They may well be smaller model single-family housing, but they are achieving a retail cost that is often less than a CrossMod would be. When MHI’s own CrossMod building member-producers are reporting that sales of their models are moving toward smaller and less optioned housing, it should be clear that MHI’s leaders are either gravely mistaken about CrossMods and/or they have an agenda of using CrossMods as yet one more ‘sabotage monopoly’ tactic. From the modular side, from MHARR, and from among MHI’s own membership, pushback on CrossMods has been steady since MHI rolled out the plan before the name CrossMod was deployed (it was previously called a ‘new class of manufactured homes.’)
Other than MHARR, MHProNews, and MHLivingNews, there has been largely fluff and cheerleading by most of those in the MHI-circle. The exception was blogger Frank Rolfe, who may have obliquely been referencing the coverage on MHProNews as part of his slam of the obvious failure of CrossMods. Rolfe said he blames MHI for low industry sales and put CrossMods into the mix of that failure. By implication Rolfe meant firms like Clayton Homes (BRK), Skyline Champion (SKY), and Cavco Industries (CVCO), because they are the ones that have largely supported or championed the CrossMods scheme.
As was noted previously, the manufactured home industry’s production has been reportedly moving to smaller and less optioned models, per publicly traded firms.
10) Using the largest D.R. Horton pitched model for purposes of the following calculations, consider this. $207,000/1200 =$172.5. That’s supposedly the price with the lot. To be clear, there are certainly times that the advertised price isn’t the actual price paid, as millions of Americans have come to realize on a range of products/services, including housing. That noted, per Copilot, see how much builders have been pressing to get closer to a package price that is competitive with HUD Code manufactured housing.
11) To be clear, there is also blame to be laid at the feed of local zoning officials, at HUD, with the FHFA, and other public officials. As trade media, our job is to report, and in reports like this, to connect the dots via analysis of what those reports could mean for the industry’s independents and others. But an obvious problem exists at MHI and with MHI linked bloggers and trade media that are so busy posturing, brownnosing, and playing themselves and those in their circle that they are unable or unwilling to reveal what is authentically occurring in the marketplace.
Another area that merits more blame/accountability are the so-called analysists in the earnings calls for publicly traded firms. While there are some occasional questions that get to something that seriously looks at questioning the leadership of these public firms who are shoveling out information and behavior that is often self-contradictory from other remarks by themselves and/or their national trade group, i.e.: MHI.
There are obviously reasons why Boor and others involved at MHI are unable or unwilling to weigh in on serious, evidence-based questions. The reasons may include, but are not necessarily limited to, self-contradictory statements/behaviors that point to material misinformation and possible collusion, or antitrust concerns.
12) As an indicator that the ‘tiny houses’ and smaller starter single-family conventional houses are not an aberration, it should also be noted that the data reflects that conventional site-builders are trending toward building smaller houses. NAHB’s Eye On Housing (2.provided this information.
According to fourth quarter 2023 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area came in at 2,156 square feet, the lowest reading since the beginning of 2010. Average (mean) square footage for new single-family homes registered at 2,374 square feet.
Since Great Recession lows (and on a one-year moving average basis), the average size of a new single-family home is now just 1.4% higher at 2,419 square feet, while the median size is just under 5% higher at 2,201 square feet.
Home size rose from 2009 to 2015 as entry-level new construction lost market share. Home size declined between 2016 and 2020 as more starter homes were developed. After a brief increase during the post-covid building boom, home size is trending lower and will likely continue to do so as housing affordability remains constrained.
13) The move by Lennar, D.R. Horton, and other site builders to strive for smaller and more affordable entry level housing price points is an apparent indictment of MHI, their state association allies, and those who authentically fly in that orbit. No doubt, some could be some who are members that are behaving toward MHI et al as a lighter version of what a smaller business may do when faced by a mobster’s protection racket. There are obvious reasons for all independent producers to be members of MHARR, which almost alone among professional trade groups dares to shine a light on some of the issues in the post-production sector of the industry. But there is also a need for independents to forge a post-production trade group that will work with MHARR to get enhanced preemption, more competitive lending, and other factors into the reality column instead of laws that exist but in practice are not properly enforced.
MHProNews has stood virtually alone in spotlighting how possible rivals to HUD Code manufactured homes have attracted some $2 billion dollars in investments in recent years alone.
Pre-Buffett MHI leaders used to promote the notion that Harvard’s JCHS fellow Eric Belsky said that the industry would surpass conventional housing by 2010. That obviously didn’t occur. But that begs the question, why didn’t it happen?
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Cavco’s Bill Boor said similarly, not long before the most recent manufactured housing downturn.
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Our son has grown quite a bit since this 12.2019 photo. All on Capitol Hill were welcoming and interested in our manufactured housing industry related concerns. But Congressman Al Green’s office was tremendous in their hospitality. Our son’s hand is on a package that included the Constitution of the United States, bottled water, and other goodies.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing.
For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.
This article reflects the LLC’s and/or the writer’s position and may or may not reflect the views of sponsors or supporters.
