Texas Real Estate Research Center: 'Housing manufacturers expressed broad-based optimism for the second half of 2023'

The manufactured housing industry in Texas has shown a significant boost in confidence, despite sluggish performance in the state's overall manufacturing sector.

According to a recent press release from the Texas Real Estate Research Center, housing manufacturers experienced a surge in business activity and outlook metrics during the month of May. This positive sentiment has been on the rise for the fourth consecutive month and has reached its highest level since 2021.

Wesley Miller, senior research associate of the Texas Real Estate Research Center describes the manufactured housing industry.

"After a productive spring season, housing manufacturers expressed broad-based optimism for the second half of 2023," Miller said. "This sentiment stands out against other manufacturing subsectors, where faltering orders and activity have forced a more cautionary tone, according to the Dallas Federal Reserve’s Texas Manufacturing Outlook Survey."

One of the factors contributing to this surge in confidence is increasing interest rates, which are drawing more buyers to the manufactured housing market. This has led to a rise in orders and, notably, the first increase in sales prices this year. Despite anticipating rising costs of raw materials and labor, manufacturers are determined to grow their workforce to meet the growing demand and boost production.

According to the release, another factor that caused uncertainty in the industry was the Department of Energy's Conservation Standards for Manufactured Housing. The enforcement of these standards was initially set for May 31, 2023, but was recently postponed by the DOE. This sudden delay, confirmed only 12 days before the due date, created uncertainty within the industry. However, with the official postponement now in place, the release suggests that this uncertainty is expected to diminish in the coming months.

The DOE's decision to postpone the compliance deadline was outlined in a document published in the Federal Register on May 30. The new compliance deadlines are now set for Tier 2 homes by July 1, 2025, and for Tier 1 homes 60 days after the enforcement procedures are issued. The DOE aims to provide clarity regarding their expectations and enforcement plans for energy conservation standards.

The Texas Real Estate Research Center, based at Texas A&M University, is a publicly funded institution focused on real estate research. It receives support from professional real estate license fees and operates under the oversight of a governor-appointed advisory committee. The center conducts extensive research and shares its findings through various channels, reaching a wide range of subscribers and readers.

Despite challenges in the manufacturing sector, the manufactured housing industry in Texas is demonstrating resilience and optimism. With increasing interest rates attracting more buyers and the postponement of compliance deadlines for energy conservation standards, the industry appears to be on a positive trajectory.