Texas manufactured home sales recover after two-month slump
COLLEGE STATION, Tex. (Texas Real Estate Research Center) – Housing manufacturers in Texas reported a surge of sales, according to the January T
“Manufacturers are showing a lot of optimism with orders, backlogs, and hiring expectations over the next six months all hitting series highs in the TMHS,” said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association. “Production pulled back sharply in the back half of 2022 and through the first quarter of 2023, but since then run rates have increased for ten straight months. Plant managers feel the trend should continue as the spring selling season begins.”
Higher run rates coincided with a ten-month payroll expansion as reflected in the TMHS, and manufacturers anticipate another increase in hiring this year.
The TMHS labor-cost-expectations index hovered around a two-year high amid preparations for increased demand. Additional supply-side challenges suggest higher costs that could spill over into the price of finished homes.
“As the overall labor market is stabilizing from the post-pandemic boom, housing manufacturers are finding a larger pool of potential workers,” said Wes Miller, senior research associate at the Texas Real Estate Research Center at Texas A&M University (TRERC).
“Manufacturers are expanding operations without straining the number of hours worked per employee. Wages and salaries have also been relatively stable across the industry for about a year, but there appears to be upward pressure on the horizon.”
The price of raw materials for manufactured housing started inching up in November after a series of idiosyncratic supply shocks.
“Residential material costs are signaling a reversal in their downward trend,” according to TRERC Research Economist Harold Hunt, Ph.D. “After showing an annual decline of almost four percent in June, the St. Louis Federal Reserve’s Producer Price Index for residential construction inputs has turned positive.”
Hunt said bottlenecks could worsen amid constraints in the Panama Canal and the Red Sea, but there are market indications that manufacturers’ supply-chain concerns remain subdued relative to the pandemic era.
“While transportation costs are increasing, the Logistics Managers’ Index indicates an expanding logistics industry with higher warehouse and transportation use and capacity,” said Hunt.
TMHS respondents indicated heightened confidence and less uncertainty in the six-month outlook with industry activity poised to accelerate.
ABOUT THE SURVEY
This sentiment survey gauges current conditions and expectations surrounding Texas’ manufactured housing industry. All members of the Texas Manufactured Housing Association (TMHA) with manufacturing facilities in the state are invited to participate, and the survey panel represents 89 percent of HUD-code homes produced in Texas. The survey, created as a joint project conducted for the manufactured housing industry by TMHA and TRERC, is updated monthly.
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