Texas’ manufactured-housing industry sees price improvements, but long-run challenges persist

​​​COLLEGE STATION – Price pressure for raw materials showed signs of easing in April, according to the latest Texas Manufactured Housing Survey (TMHS). While prices continued to increase, the raw-materials index marked its largest monthly deceleration since July 2020, and manufacturers believe that trend may continue.

"The slowdown in price appreciation for raw materials is a welcomed sign," said Dr. Harold Hunt, research economist at the Texas Real Estate Research Center (TRERC) at Texas A&M University, "but the Bureau of Labor Statistics’ Producer Price Index (PPI) continues to trend above double-digit growth. The PPI is released with a one-month lag, so we’ll have to wait until next month to see if the rest of the economy experienced price relief during April."

The root of the manufactured-housing’s price improvement is unclear, and supply-chain disruptions persisted for the eighth straight month. Production lines, however, continued to pump out new homes and chip away at backlogs.

While demand remained robust, the combination of supply-side challenges, growing uncertainty, and impending regulatory burdens weighed on the industry’s outlook and overall optimism.

"The Department of Energy’s consideration of updating efficiency standards and its preference for the most stringent changes tempered manufacturers’ expectations," said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association.

The TMHS regulatory-burden index reflected these concerns with a positive reading in 13 of the past 14 months.

"Other headwinds include higher mortgage interest rates for both real and personal property as well as a hit to housing manufacturers’ stock prices," said Ripperda.

The industry anticipates a slowdown in capital expenditures and hiring activity through the summer to adjust to these obstacles. While Texas’ manufactured-housing outlook remains positive, the health and resilience of the broader economy remains a critical factor moving forward.

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