Despite supply challenges, Texas housing manufacturers are optimistic as the spring selling season approaches, according to the latest survey by the Texas Manufactured Housing Association.
“In light of the strong run-up in site-built single-family housing, the demand for more affordable manufactured homes remains strong,” said Dr. Harold Hunt, a research economist at the Texas Real Estate Research Center at Texas A&M University, in a press release. “However, large backlogs have hampered the industry’s ability to meet that demand for some time, prompting sales teams to stave off new orders until production catches up.”
The TMHS production index increased for the ninth consecutive month, with additional activity expected.
“As infections from the COVID-19 Omicron variant wane, manufacturers are benefiting from a healthier, more productive workforce that can whittle down backlogs,” Hunt added.
February saw expanded payrolls and increased workweeks by manufacturers, although finding and attracting skilled workers remained a significant obstacle, the release noted. Additionally, labor costs elevated substantially, contributing to broad-based inflation due to supply chain disruptions.
Despite this, home production increased in January and February.
“Manufacturers believe they can pick up the pace of production even more, but every week brings another hurdle, and final rule from the Department of Energy on energy efficiency requirements is set to drop in May that could add significant friction to getting new homes out the door,” said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association.
“The factory-built model only works when you can source your materials at a scale,” he added. “If a standard product is no longer allowed because of a regulatory change and the mandated substitute isn’t available at the necessary quantities, you’ve got the makings of a slowdown.”