Texas manufactured housing expansion continues, more growth on the horizon
COLLEGE STATION, Tex. (Texas Real Estate Research Center) – General business activity increased for Texas’ housing manufacturers for the fifth consecutive month in June, according to the latest Texas Manufactured Housing Survey (TMHS), and more momentum is expected to build during the second half of 2023.
The TMHS production and sales indices reached annual highs and accelerated heading into the mid-year mark.
“There was real concern from manufacturers about overstocked inventory on retail lots and the headwind of rising interest rates throughout the back half of 2022,” said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association. “Demand for housing, however, remained resilient, and retailers posted strong sales so far this year.”
“Those sales have brought wholesale orders up for the past four months and have afforded manufacturers the ability to increase their capacity utilization and get their backlogs back to their preferred 4- to 12-week range,” continued Ripperda.
The TMHS backlog index reached an annual high in June, and respondents anticipate some additional increases over the next six months.
An uptick in supply-chain disruptions could have also contributed to the growing backlog, but upstream operations are expected to remain smooth after two years of pandemic volatility.
“Housing manufacturers predicted the improved business environment as early as November 2022, a period when higher interest rates had halted new orders and run rates,” according to Dr. Harold Hunt, research economist at the Texas Real Estate Research Center (TRERC). “As those predictions have played out, there is less uncertainty and ongoing optimism moving forward.”
Several forward-looking indices in the TMHS corroborated the positive outlook for the second half of the year, with manufacturers planning on payroll expansions and increased capital expenditures to keep pace with business activity.
All TMHA members with manufacturing facilities in the state were invited to participate in the sentiment survey, and the survey panel represents 89 percent of HUD-code homes produced in Texas.
