What Is A Prefab Home?

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Prefab homes — short for "prefabricated" — are constructed away from the home site in a factory, then shipped in sections to the customer's property for assembly. These homes can often go up much faster than traditional stick-built houses, and at a lower cost. They can be single-family or multi-family and can often be customized to the customer's specifications, though not to the same extent that a custom-built traditional home might be.

Prefab and modular homes are related but different kinds of housing. In each, there's some level of construction that takes place offsite, then the sections are trucked to your home site for assembly. In a prefab home, major components — such as already-plumbed wall units for bathrooms or kitchens, for example — are built offsite and assembled later. A modular home, however, is made up of sections that are complete, self-contained units that can be assembled with other units to create an entire home.

Prefab can cost less than a custom-built home. According to HomeAdvisor, the average cost to build a traditional single-family home in 2022 is $283,900. The comparable cost to build a prefab home is $240,000.

While hard costs such as construction labor make up a larger portion of the price tag for custom-built houses, prefab generally costs less because it requires less time for the underlying product to be created. Because the components are built in a controlled environment, and subject to inspection and quality control processes, you are likely to get high quality at a lower cost. However, these costs are not guaranteed to be passed along to the buyer.

Keep in mind that you might not receive as many customization options with prefab. Prefab homes are designed to fit the needs of the average person — they’re not based entirely on your individual needs. If you want to customize the home in certain ways, you often can, but you’ll pay more.

This type of construction can provide some homeowners with peace of mind, knowing that their home was designed by professionals and built with specified quality standards, repeated over a vast number of structures.

A prefab home is typically built just as well or better than a stick-built home. It can go up faster and cost less to build, too. But customization can be limited, and prefabs are not available in all areas of the country and for all types of housing.

SHARE: How is this page expert verified? BankrateArrow Right Michele PetryArrow Right Jeffrey BealArrow Right SHARE: BankrateArrow Right Michele PetryEdited byMichele PetryArrow RightSenior real estate editorMichele Petry is a senior editor for Bankrate, leading the site's real estate content.Connect with Michele Petry on LinkedInLinkedinGet in contact with Michele Petry via EmailEmailMichele Petry Michele PetryArrow Right Jeffrey BealReviewed byJeffrey BealArrow RightPresident, Real Estate SolutionsJeffrey L. Beal, president of Real Estate Solutions, has 40 years' experience in multiple phases of the real estate industry.About our review boardJeffrey Beal Jeffrey BealArrow Right