Print
Email
The housing crisis has been a persistent issue for years in the United States, and the global pandemic outbreak has only intensified it. This, coupled with inflation and rising interest rates, has further resulted in a decline in the availability of affordable homes. Amid the ongoing crisis, prefabricated housing developers are anticipating significant growth opportunities in the United States market in 2023.
To capitalize on the growing demand for prefabricated housing units, Volumod is looking to ramp up its production capacity over the next 12 months, with a targeted goal of completing five modules a day.
Scalability is one of the major problems faced by prefabricated housing developers globally. While there is a clear demand for affordable houses and modular housing provides an efficient solution to tackle the crisis, not many firms have been able to capitalize on the available market demand for affordable houses yet. There is a huge gap between production capacity and demand for modular homes, and this is resulting in huge revenue losses for prefabricated housing developers in the United States.
Currently, Boxabl has a production capacity of 400 homes per year. This means that Americans are having to wait several years before they receive their prefabricated units from Boxabl. While the firm is expected to expand its production capacity, like Volumod, serving a waitlist of 160,000 is projected to take years for the firm.
The majority of the leading prefabricated housing developers are facing scalability issues in the United States. To expand their production capacity these housing developers are also raising funding rounds from venture capital and private equity firms. For instance,
In Europe as well firms are facing similar issues. As a result, many of the players in the segment have initiated to expand their manufacturing and production capacity. TopHat, for instance, is building the largest prefabricated homes facility in the United Kingdom. The facility, expected to be completed in 2023, will have the capacity to produce 4,000 homes each year. This will the facility the largest modular homes factory in Europe.
Other firms such as Ilke Homes and Legal & General Modular Homes are also ramping up their manufacturing capacity. Legal & General Modular Homes, for instance, entered into a strategic collaboration with affordable housing provider Vivid in December 2022. As part of the alliance, the firm is seeking to produce 1,000 prefabricated homes annually in the United Kingdom.
From the short to medium-term perspective, ConsTrack360 expects prefabricated housing developers in the United States to enter into such strategic collaborations to boost their production capacity. Furthermore, ConsTrack360 also expects these firms to raise venture capital and private equity funding to invest in new factories and reduce the gap between supply and demand over the next three to four years.
As the housing crisis continues to deepen around the world, even government organizations are expected to increase their spending on prefabricated housing projects. In Canada, local and national governments have already announced a significant investment in the sector.
This trend is projected to further accelerate in 2023, meaning additional strain on the production capacities of prefabricated housing developers. While there is an evident growth opportunity in the United States and other markets, it is crucial for prefab housing developers to invest and expand their production capacities in 2023 to capitalize on the growing market size.
