In the evolving landscape of home construction, prefab homes - pre-assembled structures built in a factory and then transported to their permanent location - are gaining popularity. These homes offer a modern solution to traditional building challenges, but they come with their own set of pros and cons. 

In this article, we delve into the advantages and drawbacks to keep in mind when buying a prefabricated home. 

What Is a Prefabricated Home?

Prefabricated homes, also known as "prefab" home, refers to houses that are manufactured in a factory setting in panels or sections. At times, the entire house is built at the factory before being transported to the final destination, where it will be positioned in place. 

In many cases, prefab homes come with a templated floor plan that allows for some modifications in the interior, such as flooring and fixtures. However, there are some prefab plans that allow homebuyers to create a house from scratch. 

Pros of Prefab Homes

Energy Efficient

One of the advantages of owning a prefab home is that they tend to be energy efficient. Manufactured homes are typically built with tight seams that keep the heat in, which helps in reducing the cost of heating. 

Highly Durable

Prefab homes are examined multiple times throughout the construction process, ensuring they meet quality control and durability standards. In fact, FEMA has noted that manufactured homes tend to be more durable than traditional homes.

Fast Construction Times

One of the biggest advantages of buying a prefab home is its fast construction time. Because all parts come to the final site ready, all builders have to do is assemble each panel and hook up the home to utilities. 

Affordable

Typically, prefab homes cost about 10% to 20% less than traditional homes. Manufactured homes, for example, may cost $50 per square foot, while conventional, non-luxury houses cost about $250 per square foot. 

Cons of Prefab Homes

Cost of Land

If you want to put up a prefab home, you will need to purchase and own the land where it will be positioned. This can be costly as you need to make sure that the land you are purchasing is level and has access to electricity, water, and sewage systems. 

In addition, homebuyers would have to pay for soil testing and secure inspections and permits. Some prefab companies offer assistance with this process. 

Longer Move-In Time

Prefab homes take a shorter time to build onsite. However, you may have to wait for months while the panels are being manufactured. 

More Up-Front Payments

When you buy an existing home, you are given the option to make a downpayment and pay the rest of the mortgage over time. With prefab homes, buyers are required to pay for the home's construction before moving in. That being said, these payments are made in installments. Some prefab companies also offer financing and construction loans.

(Photo by Sanne Derks/Getty Images)
A view of some of the ten small-scale energy neutral pre-fab "tiny houses" developed by Project De Hopman in the past year on December 21, 2020 in Aarle-Rixtel, Netherlands. The houses cost around 120,000 euros, qualify for mortgages, respond to increased demand for affordable and sustainable housing, and therefore are accessible for the large public.