COLLEGE STATION – Texas’ manufactured-housing industry ended the year on a low note, according to the latest Texas Manufactured Housing Survey (TMHS). Respondents unanimously noted a decrease in business activity relative to November. The industry extended a year-long pullback on production as higher interest rates shocked demand and reset the housing market more broadly.
“Housing manufacturers are still grappling with decreased demand, forcing them to cut payrolls and reduce workweeks,” said Wesley Miller, senior research associate at the Texas Real Estate Research Center (TRERC). “Inventories are building up on the retail side, resulting in fewer orders for manufacturers until more homes are moved.”
Despite ongoing monetary tightening by the Federal Reserve and recessionary concerns, survey respondents are more confident regarding the next six months.
“As Texas’ population continues to grow, so will the market for manufactured housing,” said TRERC Research Economist Dr. Harold Hunt. “Although manufactured-housing sales aren’t currently as robust as they have been, the state will always have a need for affordable housing.”
The TMHS reflected the optimistic outlook with the future sales index increasing from 40 to a record-high of 78. The survey’s future general-activity index reached its second highest value at 68.
Housing manufacturers plan to ramp up production and hiring activity to respond to the rebound. Additional supply-chain smoothing and input-price stabilization contributed to the industry’s optimism.
Proposed regulatory requirements, however, remain a prominent concern for TMHS respondents heading into 2023.
“Manufacturers have five more months to prepare for the Department of Energy’s (DOE) new conservation standards and the Environmental Protection Agency’s updated Energy Star program requirements,” said Rob Ripperda, vice president of the Texas Manufactured Housing Association. “These adjustments require a lot of retooling, design updates, new materials sourcing, and a host of other process changes for each of Texas’ 26 manufacturing plants. The final impact on construction costs is unknown.”
The Texas Real Estate Research Center has a wealth of economic information online for free.