Modular Home Demand Up as Rates Fall

Mortgage applications increased by 11.3% in March compared to last year. New Construction loan demands rose 7.1%. One reason is interest rates are at an all time low as the 30-year fixed mortgage fell to 4.96%. With an increase in mortgage applications the modular housing industry has also seen an increase in sales. In February sales were up by 10% compared to January of this year. Buying a modular home has never been easier with low interest rates and the government providing $10,000 incentives for first time homebuyers it’s no wonder why people are coming out of the woodwork.

Modular Home expert Randall Eaton says, “Modular homes do qualify for a tax credit, activated when escrow closes, is up to $10,000 spread over three years. The tax credit is actually equal to 5 percent of the purchase price or $10,000, whichever is less. Like "stick" homes, manufactured housing also qualifies for up to $8,000 in federal stimulus tax credit for first-time homebuyers, he pointed out. Both federal and state tax credits apply only to owner-occupied homes”.

“Potential homebuyers are starting to learn about these incentives which are creating some excitement in the modular home industry as well as the manufactured home industry”, Eaton says. “With interest rates being so low and money being pumped into the housing system I suspect the industry will see modest growth in 2009 and in 2010 a significant increase over 2009”, Eaton says.