Texas housing manufacturers prepare for sales surge despite ongoing supply-chain disruptions

​​​COLLEGE STATION – Manufactured housing sales were relatively flat in 2021, but the industry is optimistic about demand and expects Texas activity to accelerate in 2022.

Seven months of production growth have improved the backlog of manufactured homes, according to the latest Texas Manufactured Housing Survey (TMHS).

"The long backlogs that the industry experienced throughout 2021 and the near continuous rise in materials and labor costs limited manufacturers’ ability to take in new orders when delivery times were running in the 40-week range," said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association.​

"Manufacturers continue to pull those backlogs down through capital investments in their existing plants, bringing new plants online, and expanding their labor force. These measures should open up the order-flow spigots. Housing demand has remained strong, and investors are planning the greenfield development of several new manufactured-housing communities across the state in 2022."

The TMHS capital expenditure index increased for the 19th consecutive month with additional investment projected on the horizon. The employment index expanded similarly despite skilled-labor shortages that have driven wages and salaries upward. Ongoing supply-chain disruptions continued to contribute to inflationary pressure.

"The sudden surge in cases of the COVID-19 Omicron variant is again dampening optimism about smoothing the supply chain," said Dr. Harold Hunt, research economist at the Texas Real Estate Research Center at Texas A&M University. "Although less severe than the Delta variant, employers may still see significant employee absenteeism from Omicron in the weeks ahead."

Despite these headwinds, Texas manufacturers noted less uncertainty and an improved outlook for the first half of 2022.

The Texas Real Estate Research Center has a wealth of economic information online for free.