Once viewed as a niche asset class, manufactured housing has established itself as one of the most resilient performers in commercial real estate, propelled by strong affordability-driven demand, reliable cash flows and low delinquency rates, according to Trepp.
The U.S. has roughly 7.4 million manufactured housing units — about 5% of the nation’s nearly 148 million housing units. Production has climbed steadily, reaching 103,000 units in 2024, more than double the output seen a decade earlier, data from the Manufactured Housing Association for Regulatory Reform shows. Even with the uptick in supply, vacancy levels remain low at 5.2%, underscoring the sector’s demand.
Affordability is a key driver. The average manufactured home sells for roughly $165,000 and provides about 1,392 square feet of space. By comparison, the median price for a single-family home is $410,800. That pricing gap, combined with migration trends into the Sun Belt, an aging population and the broader housing affordability crisis, has helped sustain occupancy and drawn continued investor interest. Operators benefit from long-term tenant stability because manufactured homes are difficult to move, which ensures steady income streams.
Investment performance has also proved competitive. Cap rate analysis highlights how manufactured housing has narrowed its spread relative to multifamily over the past decade. In 2015, the implied cap rate was 8.41% compared with 6.96% for multifamily, a 145-basis-point difference. By 2020, the gap had fallen to 46 basis points. In 2024, rates were nearly identical, at 5.48% for manufactured housing versus 5.52% for multifamily. This year, manufactured housing registered 5.13%, while multifamily moved ahead at 5.67%. Lower cap rates suggest investors are attributing higher valuations to the asset class. Regional variations remain, with cap rates ranging from 6.07% in the East South Central region to 4.74% in the Mountain region.
The sector’s credit performance further supports its standing as a defensive allocation. As of July 2025, delinquency rates for manufactured housing stood at just 1.39%, compared with 10.99% for office, 6.66% for retail and lodging and 6.19% for multifamily. Even during the volatility of 2020 to 2022, Trepp notes, manufactured housing avoided the sharp increases seen in other commercial real estate segments.
Despite its strong fundamentals, institutional ownership of manufactured housing communities remains limited. Only about 20% of communities are institutionally controlled, and the average transaction size of $5.3 million falls well below the $13.6 million average for multifamily. That creates hurdles for scaling investment, since institutional buyers would need to complete roughly twice as many acquisitions to hit portfolio targets.
Trepp concludes that manufactured housing is no longer a niche play in the commercial real estate market, but rather a core defensive allocation with durable appeal.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.