1

Multifamily Affordable Housing Market Commentary

SEPTEMBER 2023

Lack of Communities Leaves Fundamentals at MHCs Tight

Number of Factories Building Manufactured Housing Grew

Manufactured housing refers to housing built in a factory after 

June 15, 1976 and constructed in accordance with the U.S. 

Department of Housing and Urban Development’s (HUD) 

Manufactured Home Construction and Safety Standards code 

(HUD Code), which sets minimum standards for size and quality 

of construction.

The number of facilities producing these factory-built homes 

conforming to HUD standards has grown in recent years. In 2022, 

there were 35 companies producing factory-built homes with a 

combined 146 production facilities, up from 133 production 

facilities in 2019. 

A Third of Manufactured Homes are Shipped to MHCs

Manufactured homes can be placed in a variety of locations. 

Developers of Planned Unit Developments (PUD) or Subdivisions 

may include manufactured housing built to HUD standards for 

purchase. Other buyers of manufactured homes may have them 

placed on private land outside of a community for 

homeownership or as a rental. However, annually, as shown in 

the chart to the right, roughly a third of manufactured homes are 

shipped to MHCs, where they have been purchased by the MHC 

owners to either sell to a prospective homeowner or to offer as a 

rental unit. 

31% 36%

21%

23%

49% 41%

2021 2022

Private Property Elsewhere

Subdivision/PUD

Land-Leased/MHC

Location of New Manufactured Homes 

Shipped 

(for Residential Use Only)

Source: U.S. Census Bureau and U.S. Department of 

Housing and Urban Development, Manufactured 

Housing Survey

Note that data was provided for only about half of the 

units shipped which may overstate the share of homes 

placed in subdivisions/PUD

Manufactured housing units that are pre-fabricated in factories remain an important source of unsubsidized 

affordable housing for an estimated 17 million residents, according to data from the 2021 American Community 

Survey (ACS). However, not all purchasers of manufactured homes can afford to purchase the land needed to 

situate their new home, and some prefer to avoid the maintenance associated with owning that land. Manufactured 

Housing Communities (MHCs), also known as land-lease communities, address this need. For those residents who 

own their manufactured home, these communities offer pad sites for rent, which are spaces where owners can 

place their homes that also provide access to utility hookups. MHCs can also have a limited number homes for rent. 

According to information from Datacomp Appraisal Systems, Inc., which verifies the existence and location of 

MHCs, as of second quarter 2023, there were just under 44,000 MHCs providing land for lease to owners, as well as 

rental of both the pad site and the manufactured home itself. While the manufactured housing sector has remained 

steady over the past couple of years, rising interest rates have begun to impact production of manufactured homes. 

However, demand for MHC pad sites remained high in the first half of 2023.
2

Multifamily Affordable Housing Market Commentary

Average Sales Price of New Manufactured Homes* 

(Dec. 2018 – March 2023)

* Sales price as of December of each year.

Source: U.S. Census Bureau and U.S. Department of Housing 

and Urban Development, Manufactured Housing Survey

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

$110,000

$120,000

$130,000

0

20,000

40,000

60,000

80,000

100,000

120,000

2018 2019 2020 2021 2022 2023

Full Year 1H

Shipments of New Manufactured Homes (NSA) 

January 1, 2018 – June 30, 2023

Source: U.S. Census Bureau and U.S. Department of Housing 

and Urban Development, Manufactured Housing Survey

Sharp Increase in the Sales Price of Manufactured 

Homes

Since the end of 2020, there has been a sharp increase in 

the sales price of manufactured homes, as shown in the 

adjacent chart. The pandemic caused supply chain delays 

and rapid increases in the cost of supplies, particularly 

wood for framing and construction. This combined with 

the pent-up demand for housing caused the average price 

of a new manufactured home to increase to an estimated 

$123,200 as of December 2021. This is almost 50 percent 

higher than the $82,400 recorded in 2018, just three years 

earlier. The average sales price has remained elevated, 

totaling $124,700 as of March 2023, which appears to have 

affected shipments of new manufactured homes.

Construction of Manufactured Homes Slowing

According to the U.S. Census Bureau’s Manufactured 

Housing Survey, from 2018 to 2020, the total number of 

manufactured homes completed averaged about 95,200. 

Pent-up demand, along with rising housing prices and low 

interest rates, increased interest in manufactured homes 

as a more affordable source of housing. A recent study, 

from the Harvard Joint Center for Housing Studies, 

Comparison of the Costs of Manufactured and Site-Built 

Housing, calculated the nationwide cost to build a 1,568 

square-foot home to be just over $200,000. As a result, the 

number of factory-built homes sold recently broke 

through the 100,000 threshold for the first time since 2006. 

The number of homes sold in 2021 rose by 12.1% to 

105,800 and rose by another 6.7% in 2022 to 112,900. 

However, given rising interest rates starting in March 2022 

and continuing into 2023, the number of new 

manufactured homes completed appears to be declining. 

As shown in the adjacent chart, the number of homes 

completed in the first half of 2023 totaled just 44,000. This 

is the lowest number of units completed for any half-year 

over the past six years and is below the 46,000 units 

completed in the first half of 2020, at the start of the 

pandemic. Should this pace of construction continue, the 

number of homes shipped will again likely fall below 

100,000 units.
3

Multifamily Affordable Housing Market Commentary

Only Three MHCs in the Process of Construction.

There were only three MHCs under construction as of mid-August 2023, representing under 450 pad sites, 

according to data from CoStar, Inc. This represents a fraction of new MHCs that were produced 20 years ago. In 

comparison, Dodge Data & Analytics estimates that there were 730,000 new multifamily rental units under 

construction as of the end of July that are scheduled to be delivered by year-end 2023. 

While two of these MHC construction projects were for new developments, one is an expansion. Sun 

Communities is building Phase II of Sunset Ridge, located outside of Austin, by adding 177 pad sites to its existing 

MHC. By contrast, Cameron Homes, located in Bozeman, MT, is a new development and will contain 200 pad sites 

for new manufactured homes when complete. Most residents will have an opportunity to work with the 

developer to design and purchase their manufactured homes. 

Not All MHCs are Permanent Housing

While most MHCs under construction are meant to offer long-term housing, occasionally communities under 

construction may include vacation homes or even spaces for recreational vehicles. These types of MHCs are 

sometimes easier to construct due to lower barriers to entry in many local areas. One such example is The 

Beachclub at Whalehead MHC with 66 pad sites in Corolla, NC, one of the three new MHCs currently under 

construction. 

MHCs Completed and Expanded in a Variety of States

According to CoStar, in addition to the three MHCs under construction, about 21 MHCs have been built or 

expanded since the start of 2022. As shown in the left map below, while they are in a variety of states, most are in 

the South and West, which have traditionally seen greater investment in MHCs.

Demolition Occurs

However, as shown in the chart below on the right, fewer new pad sites have been built than demolished in some 

years, making growth in the number of pad sites and communities extremely slow. For instance, in 2017, 1,525 

new MHC pad sites were built, while 2,175 pad sites were demolished, for a net loss of 650 pad sites. As a result, 

vacancies remain low at MHC on average across all regions, due to an ongoing supply shortage of pad sites.

New Manufactured Housing Communities Recently 

Completed and Under Construction (2022 and Beyond) Completions and Demolitions (2000 – Q2 2022)

Source: CoStar Group Inc.
4

Multifamily Economic and Market Commentary

Age 55+ - MHC Occupancy and Pad Site Rents for Select Regions* 

Occupancy Q2 2023 Occupancy Q2 2022 Change Rent Q2 2023 Rent Q2 2022 Change

Midwest 93% 93% 0.1% $523 $496 5.4%

Northeast 98% 97% 0.1% $570 $546 4.4%

Pacific 99% 98% 0.3% $854 $811 5.3%

South 96% 95% 0.4% $694 $634 9.5%

Southwest 96% 95% 0.6% $648 $606 6.9%

West 94% 94% 0.1% $756 $695 8.8%

National 97% 96% 0.4% $717 $667 7.5%

Two Types of MHCs

Roughly one-third of MHC are Age 55+ MHCs, targeted to older adults. Two-thirds are All Ages MHCs, which tend to 

attract families and residents of all ages, including those older adults that do not want to live in an Age 55+ 

community. Fundamentals in both segments of MHC appear to have weathered the pandemic, recent inflationary 

trends, and now elevated interest rates – at least so far. 

Occupancy Remains High in Age 55+ MHCs

Some older residents prefer purchasing homes in Age 55+ MHCs due to the ease of maintenance and enjoyment of 

the amenities that are usually offered. This trend has not changed over the past several months, despite recent 

inflation levels. Nationally, the occupancy rate in Age 55+ MHCs remained high with just a 0.4% uptick in occupancy 

year over year to 97% as of second quarter 2023, as shown in the table below. Occupancy in five of the six regions 

tracked remained stable, with the Southwest region recording just a 0.6% increase.

With occupancy rates of 98% or higher, Age 55+ MHCs in the Northeast and Pacific regions of the country had the 

highest occupancy rates as of second quarter 2023 among the six regions tracked by Datacomp. The South and 

Southwest regions had average occupancies of 96%, with the West and Midwest regions recording occupancies of 

94% and 93%, respectively, as of the end of second quarter 2023. 

Source: Datacomp/JLT * As of July 5, 2023, Based on Trailing 12-month average. Note: Pad Site rents exclude utility payments

Southeast: 13 states including Florida, Georgia, and the Carolinas. Northeast: seven states including Pennsylvania, New York, and New Jersey,

Pad Site Rents Record Strong Growth in Most Regions

As shown in the table above, pad site rents vary widely among regions. The Pacific region, which is comprised of the 

high-cost coastal states of California, Oregon, and Washington and has a 99% occupancy rate, had the highest monthly 

rent at $854 per month, as of second quarter 2023, according to Datacomp. By contrast, the large Midwest region, 

which is comprised of 12 states including Michigan, Illinois, and Indiana, had an average pad site rent that was more 

than $330 lower at $523 per month. 

Low vacancies and ongoing job and wage growth led to pad site rents across all regions growing by 7.5% year over year 

on average as of second quarter 2023, more than double the 3.0% non-seasonally adjusted inflation rate and the 

estimated 1.3% average national increase in apartment rents. Pad site rents in the Southern region, which continues to 

see significant population growth in many states, recorded the highest growth rate at 9.5% year over year, bringing the 

average monthly rent to $694. Pad site rents in the Northeast region, which has the fewest MHCs, recorded a lower 

growth rate of 4.4% year over year, bringing the average monthly rent to $570. 
5

Multifamily Economic and Market Commentary

All Ages MHC Occupancy Remains Steady

MHC occupancies remained mostly steady in All Ages communities in the six regions tracked by Datacomp, with 

the national average occupancy rate increasing by just 0.4 percentage points during the year but remaining at 

93% as of second quarter 2023. Occupancies remained at 93% or higher for five of the six regions tracked by 

Datacomp as of the end of second quarter 2023, as shown in the table below. The average occupancy rate was 

highest in the Pacific region at 99%, followed by the West region at 97%. The Midwest recorded the lowest 

occupancy rate, finishing the quarter with an occupancy rate of 89%. 

Occupancy Q2 2023 Occupancy Q2 2022 Change Rent Q2 2023 Rent Q2 2022 Change

Midwest 89% 89% 0.5% $490 $461 6.3%

Northeast 94% 93% 0.2% $577 $543 6.3%

Pacific 99% 99% 0.1% $1,008 $951 6.0%

South 95% 95% 0.4% $575 $536 7.3%

Southwest 94% 94% 0.6% $550 $507 8.5%

West 97% 96% 0.1% $762 $703 8.4%

National 93% 93% 0.4% $624 $584 6.8%

All Ages MHC - Occupancy and Rents for Select Regions* 

MHC Cap Rates Tick Up

After declining significantly in recent years, capitalization 

rates for institutional-quality MHCs have started to 

increase, as shown in the adjacent chart. According to MSCI 

Real Assets, the average cap rate for MHC property sales 

fell from an average of 6.8% in second quarter 2013 to an 

estimated 4.7% as of second quarter 2022. Since then, 

however, the average MHC cap rate has increased slightly 

to 5.0% as of second quarter 2023. CoStar data, which 

includes smaller transactions for which cap rates can vary 

more, shows a similar trend: Cap rates rose to 7.8% as of 

second quarter 2023 from 7.2% a year earlier.

Source: CoStar, MSCI Real Assets Note: MSCI data is quarterly based 

on a trailing 12- month average. Includes property or portfolio sales 

of $2.5 million or greater.

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

MSCI CoStar

Manufactured Housing Community Average Cap Rate

Source: Datacomp/JLT * As of July 5, 2023, Based on Trailing 12-month average. Note: Pad Site Rents exclude utility payments. 

Pad Site Rent Reaches Over $1,000

Pad site rents in All Ages MHCs grew strongly, increasing by 6.8% year over year to an average of $624 as of 

second quarter 2023, as seen in the table above. However, this remains below the 7.5% increase to $717 per 

month recorded at Age 55+ MHCs over the same period.

Pad site rents are highest in the Pacific region, growing by 6.0% year over year to over $1,000 for the first time as 

of second quarter 2023. Nevertheless, pad site rents saw the fastest growth in the Southwest and West regions, 

where they grew approximately 8.5% to $550 and $762, respectively. Even in the traditionally affordable Midwest 

region, rents rose by 6.3% to $490 as of second quarter 2023, decreasing affordability.
6

Multifamily Affordable Housing Market Commentary

Sales Decline Following a Strong 2021

According to MSCI Real Assets, sales of MHCs totaled an estimated $6.3 billion in 2022. As shown in the lower 

left chart, this is the second-highest volume recorded in the last six years. CoStar data is similar but with an 

estimated $5.3 billion in sales in 2022. We believe that sales remained elevated due to a several factors. For 

one, investors realized that demand fundamentals for MHCs would likely remain positive due to a lack of 

affordable housing across the country. In addition, interest rates appeared poised to rise further in 2022, 

enticing investors attempting to avoid higher interest rates in the near future. 

Single asset sales represented just under 70% of MHC sales volume in 2022, with just under 400 properties 

containing an estimated 54,000 pad sites having been sold. In addition, 27 portfolios containing just under 200 

MHCs with an estimated 17,000 pad sites also exchanged hands during that timeframe. There was also one 

entity sold for about $1 billion which owned five properties concentrated in Florida with just under 3,900 units.

However, during the first half of 2023, sales of MHCs totaled just $1.0 billion, which is about 58% lower than the 

sales activity for the first half of 2022, according to MSCI Real Assets. This is also lower than the $1.8b in sales 

recorded for the first half of 2020, during the height of the pandemic. We believe that the rapidly rising interest 

environment, which started in March 2022 and continued into 2023, increased borrowing costs, pricing some 

would-be buyers out of the market.

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

2017 2018 2019 2020 2021 2022 2023

Sales Volume ($B)

MSCI 1H

MSCI Full Year

CoStar

MHC Sales Volume ($billions)

Jan. 1, 2017 – June 30,2023

Source: MSCI Real Assets, CoStar

$0

$100

$200

$300

$400

$500

$600

$700

$800

Polk Co Phoenix Tampa Fort

Collins

Orlando

Sales Volume ($M)

Single Asset Portfolio

MHC Sales Volume ($millions) 

Select Markets

Source: MSCI Real Assets

Sun Belt Metros Recorded Some of the Highest Sales in 2022

Three of the five top areas with the highest total sales volume over the past four quarters were in Florida. As 

shown in the chart above right, these included Polk County, with an estimated $700 million in MHC exchanging 

hands; Tampa with sales of $300 million; and Orlando with just under $140 million in MHC sales. Investors also 

spent over $310 million to acquire MHCs in Phoenix. However, investor interest in MHCs has grown beyond the 

Sun Belt. Investors acquired over $150 million in MHCs in Fort Collins, CO, making it one of the top metros for 

MHC investment over the past year.
7

Multifamily Economic and Market Commentary

MHC Loan Volume by Type of Lender

Jan. 1, 2018 – June 30, 2023

MHC Sale Prices-Per-Site Increased

According to data from MSCI Real Assets, MHC sale 

prices-per-site totaled an estimated $77,000, as of 

second quarter 2023. In comparison, as of first quarter 

2017, the average price-per-site was $47,000, indicating 

that the MHC price-per-site has risen 63% over the past 

six years. This is higher than the 55% increase in priceper-unit of sales of multifamily properties over the same 

timeframe.

MHCs are far less expensive to purchase than 

multifamily properties. The average MHC price-per-site 

as of second quarter 2023 was only a third of a 

traditional multifamily property price-per-unit of 

$221,000.

2023 CMBS Volume Drops

As shown in the adjacent chart, in 2021 the CMBS sector 

financed about $3.7 billion in MHC loans, partly due to 

an affiliate of Brookfield Asset Management securing 

$2.2 billion to refinance a portfolio of 124 U.S. MHCs 

located across 13 states. However, the market shift has 

been dramatic: CMBS conduits only financed $248 

million in MHC loans in all of 2022. In addition, they 

financed $34 million in the first half of 2023, which could 

lead to annual volume of just $68 million.

2023 Overall Lending Volume Declining

Although not a complete market view, publicly available 

data combined with third-party vendor data provides 

insight into financing trends. As shown in the chart to 

the right, total lending volume declined to an estimated 

$5.6 billion in 2022, from a record $11.0 billion in 2021. 

The total lending volume for the first half of 2023 totaled 

$2.4 billion, which means that lending volume could fall 

even further to $4.8 billion for all of 2023. However, we 

believe these estimates for 2023 are likely on the low 

end. 

Refinances More Prevalent than Sales

Refinances of MHCs remain more prevalent than 

financing for acquisitions, accounting for about 75% of 

financing volume since the start of second quarter 2022, 

according to data from MSCI Real Assets.

$0

$25,000

$50,000

$75,000

$100,000

$125,000

$150,000

$175,000

$200,000

$225,000 MSCI MHC Price per Lot

Apartment PPU

Manufactured Housing Community Sales Price 

per Site vs. Multifamily Sales Price per Unit

Source: MSCI Real Assets

Quarterly based on trailing 12-month average. Includes property or 

portfolio sales $2.5 million or greater.

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

2018 2019 2020 2021 2022 1H 2023

Fannie Mae Freddie Mac CMBS Other*

0

1,000

2,000

3,000

4,000

CMBS MHC Lending Volume ($millions)

Jan. 1, 2013 – June 30, 2023

Source: Commercial Mortgage Alert

Source: Fannie Mae, Freddie Mac, Commercial Mortgage Alert, CoStar

* Note that Other includes Banks, Credit Unions, Insurers and Seller 

financing among other things. 
8

Multifamily Economic and Market Commentary

Fannie Mae Finances MHCs...

As shown in the adjacent chart, Fannie Mae 

financing of MHCs increased in 2020 but has 

returned to more historically normal levels in recent 

years. Fannie Mae financed $2.7 billion of lending 

on MHCs during all of 2022 and has financed $1.2 

billion through the first half of 2023.

...which Have Performed Well

As of June 30, 2023, Fannie Mae’s book of business 

includes 1,832 MHC loans with a total unpaid 

principal balance of just under $21 billion as shown 

in the table below. This represents an estimated 4% 

of Fannie Mae’s book of business.

Source: Fannie Mae Multifamily Business Information 

Presentation as of August 2023.

Fannie Mae’s MHC book of business had a serious delinquency rate of just 0.02 percent as of June 2023. While 

the average unpaid principal balance was $11.2 million, about half of all loans involved smaller properties, 

indicating these loans had an original unpaid principal balance of $6 million or less at origination. 

Total

UPB* ($B)

Loan Count Average UPB* 

($M)

Average 

OLTV**

Share Fixed 

Rate

Share Full 

Interest- Only

Share Partial 

Interest – Only1

Share Small 

Balance2

Serious 

Delinquency 

Rate3

$20.6 1,832 $11.2 63% 93% 30% 56% 50% 0.02%

Source: Fannie Mae Q2 2023 10Q Financial Supplement * UPB : Unpaid Principal Balance ** Weighted Average Origination Loan to Value Ratio

1 Includes any loan that was underwritten with an interest-only term less than the term of the loan, regardless of whether it is currently in its interest-only period.

2 Small balance loans refers to multifamily loans with an original unpaid balance of up to $6 million nationwide.

3 Multifamily serious delinquency rate refers to multifamily loans that are 60 days or more past due, expressed as a percentage of the company’s multifamily 

guaranty book of business, based on unpaid principal balance. Multifamily serious delinquency rate for loans in a particular category (such as acquisition year, asset 

class or targeted affordable segment) refers to seriously delinquent loans in the applicable category, divided by the unpaid principal balance of the loans in the 

multifamily guaranty book of business in that category.

Select Credit Characteristics of Fannie Mae MHC Book of Business as of June 30, 2023

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

2017 2018 2019 2020 2021 2022 1H

2023

Sales Volume ($B)

Fannie Mae MHC Financing Volume ($billions)

Jan. 1, 2017 – June 30, 2023

More MHC Needed

Despite the rising prices of new manufactured homes, vacancies remain low at many MHCs, indicating that 

demand is outstripping supply. However, development of MHCs has not kept up with demand. Many local 

jurisdictions have zoning restrictions against MHCs, creating barriers to the development of new MHCs. As a 

result, building new communities takes a long time, when they can be built at all. The current Administration 

recently sought to ease regulatory barriers and zoning laws through new incentives. However, we expect the 

development of new MHCs will remain limited over the next few years, as it will take some time for local 

jurisdictions to change zoning laws, even with the new incentives.
9

Multifamily Economic and Market Commentary

Tanya Zahalak

Multifamily Economics and Strategic Research – Economics – Advisor 

Multifamily Economics and Strategic Research

September 2023

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic and Strategic Research (ESR) Group included in 

these materials should not be construed as indicating Fannie Mae’s business prospects or expected results, are based on a number 

of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. 

Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it 

does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. 

Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, 

opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group as of the date 

indicated and do not necessarily represent the views of Fannie Mae or its management.

© 2023 Fannie Mae