Is It Cheaper to Buy a Prefab Home or Build? (Pre Fabricated Homes)

The general rule of thumb is that prefab construction is cheaper than stick-built homes by an average of 10 to 25 percent. Why? Mass-produced materials on an assembly line cut down costs because factories buy supplies in bulk.

Labor costs are reduced with prefab expandable homes since carpenters, plumbers, and electricians are not required at individual construction sites. Additionally, faster build times contribute to overall cost savings.  

The starting cost typically ranges from $150 to $400 per square foot, and this price may sometimes include interior fixtures. It’s important to confirm whether the prefab package covers items such as appliances, windows, flooring, insulation, electrical wiring, and doors.  

However, the listed price of a prefab home is rarely the total cost. You must also account for expenses like purchasing the land, soil testing, site surveys, permits, and utility hookups. Site preparation can range from minor costs to significant expenses depending on the landscape. Most prefab packages also exclude the foundation.  

Additional costs may include landscaping, driveways, garages, and hiring a local contractor or builder to complete the home. These expenses can vary widely—for instance, land and contractor fees near Boston may be significantly higher than in rural South Carolina.

How Long Does It Take to Build a Prefab Home?  

A prefab home can be completed in as little as three months, depending on its size and level of finishes. Most prefab homes are built within four to six months, significantly faster than traditional homes, which typically take around eight months to construct. In some cases, custom home construction can take years to complete.  

Prefab construction is up to 50% faster because most components are built in a factory, minimizing weather delays, streamlining construction processes, and ensuring predictable delivery schedules. Additionally, fewer change orders and reduced labor scheduling conflicts contribute to the time savings. However, in some regions, the permitting process for prefab homes can be time-consuming and may extend the overall timeline.

Is Prefab More Sustainable Than Traditional Homes?

Prefab homes are generally regarded as more eco-friendly than traditional stick-built homes.  

The prefab construction process generates less waste. Unlike traditional construction, which involves multiple deliveries and often results in excess wood, tiles, and debris, factory processes are more efficient. Prefab companies are also more likely to recycle or repurpose materials used during production.  

Factory-built components often feature tighter seams than those of stick-built homes, improving energy efficiency for heating and cooling. Additionally, many prefab builders prioritize eco-friendly options, offering energy-efficient appliances, sustainable materials like bamboo flooring, and add-on features such as solar panels and rainwater collection systems.  

Prefab homes also score high on resilience. Built to withstand transportation by truck, they are often structurally stronger than traditional homes, making them particularly advantageous in areas prone to earthquakes, hurricanes, or high winds.

Can You Customize a Prefab Home?  

Yes, prefab homes can be customized! Most manufacturers offer various finish packages and upgrades, and some even allow for different layout configurations. However, keep in mind that customization options may increase the overall cost of your home.  

Can You Finance a Prefab Home With a Traditional Mortgage?  

Financing a prefab home is similar to financing a traditional home, but there are some key differences, particularly with the down payment. Before selecting a prefab manufacturer or land, determine how much you can afford, as your loan must cover all construction costs, including land, the prefab structure, and finishes.  

While the process mirrors traditional home financing, you’ll likely need a construction loan initially. These loans often require a higher down payment—typically at least 20%. Once construction is complete, most lenders will convert the construction loan into a permanent mortgage.