As the need for workforce housing grows across the country, the demand for renting in manufactured-home communities (MHCs) is rising, according to commercial mortgage brokerage Marcus & Millichap.
This trend also is being fueled by the relatively low price of renting in an MHC compared to the growing cost to rent an apartment. As a result, vacancies within manufactured-housing communities have decreased in all U.S. regions during the past 12 months.
The shrinking vacancy rate is boosting rent growth nationwide, Marcus & Millichap reported, with manufactured-housing units in the Southeast region posting the largest year-over-year rent increase this past July at 4.8%. That rise brought the region’s average rent to $542 per month, trailing only the Mountain ($582) and Pacific ($573) among the most expensive rents by region.
Manufactured-home rents vary widely across the country, from smaller metro areas where the average rent is less than $300 to some coastal California cities, where tenants pay more than $1,000 per month. Rents have risen considerably in metros where the vacancy rate has dwindled to less than 1%. Denver, for example, has a vacancy rate of 0.8% and saw year-over-year rent growth of 5.3% to $736. Long Island, New York, with a 0.9% vacancy rate, posted 4.3% year-over-year growth and had an average monthly rent of $711 in July.
At the other end of the spectrum are a number of metros in the Midwest and East, where vacancy rates still hover in double digits and rents remain below $500. Detroit, for one, has a 13.9% vacancy rate and, despite 4.5% annual rent growth in July, has an average rent of $467. Nearby Flint, Michigan, has a 34.7% vacancy rate, with an average rents of $379 and 4.4% annualized growth.
