Real Estate
From Novelty to Necessity: The Growing Tiny Home Movement
Visualizing the Rise of Tiny Homes
Born out of the desire for a simpler, more affordable way of life, the tiny home movement has spread at a furious pace—with the global market estimated to grow by a CAGR of almost 7%, adding nearly $5.2 billion in market size by 2022.
Given the economic pressures of today’s world, these alternative housing solutions have become not only a viable option for many people, but a vital one.
Today’s infographic from Calculator.me illustrates how the tiny home market got so big, and how it fares against traditional housing when it comes to providing environmentally friendly and affordable options.
How Did Tiny Homes Get So Big?
It was not until the 2009 recession hit the U.S. that tiny homes became more of a realistic option, as the benefits of downscaling became more apparent.
From then on, three things propelled the popularity of tiny homes: rising house costs, shrinking incomes, and a greater consideration for the environment.
Today, 63% of U.S. millennials would consider living in a tiny home. However, the need to go tiny is not only confined to millennials, as 40% of tiny home owners are over fifty years old.
Tiny Vs. Traditional
According to the infographic, a home is considered tiny (or micro) when it is between 80-400ft², and is at least 8ft in height.
Tiny homes also come with a tiny pricetag, costing just $23,000 on average to build—meaning tiny homes are almost ⅒ the price of traditional homes.
| Metric | Tiny Homes | Traditional Homes |
|---|---|---|
| U.S. Median Cost | $59,884 | $312,800 |
| Average Cost To Build | $23,000 | $206,132 |
| Home Ownership | 78% own their home | 65% own their home |
| Mortgage | 32% have a mortgage | 64.1% have a mortgage |
| Credit Card Debt | 40% have credit card debt | 37% have credit card debt |
Other benefits of tiny home living include:
- Avoiding mortgage debt
- Less maintenance required
- Allows for a more flexible lifestyle
Further, tiny homes are providing people with alternative solutions for more sustainable living.
An Environmentally Friendly Way of Living
Certain models of tiny homes use energy from solar panels—presenting ample opportunities for an independent off-grid lifestyle. Moreover, research from Virginia Tech shows that living in tiny homes reduces energy consumption by up to 45%.
Using less energy can also be attributed to tiny homeowners using the space outside as an extension of their home. In fact, when there is usable space available outdoors, tiny home living may not seem as drastic in comparison to living in a traditional home.
Room For Improvement
There are however, some challenges for those who are considering this way of life. Zoning laws and building codes in the U.S. can be restrictive, with some states more supportive of the idea than others.
Despite these barriers, there are numerous organizations and initiatives that have been created in order to eliminate the pain points that come with tiny homes, and legitimize the industry.
Not Just a Passing Trend
With the promising trajectory of tiny homes, it is inevitable that the interest from global retailers continues to grow.
Japanese minimalist company, Muji, released their own tiny homes in 2017, costing $26,000 on average. At just under 107.6 ft², these tiny homes are prefabricated, meaning they are constructed in a factory off-site.
Amazon also recently announced their foray into the tiny home space, with dozens of models available on their website—delivering new homes right to their customers’ front doors.
The Future Comes in All Shapes and Sizes
Beyond the typical tiny home formats we see entering the market en masse, there are other alternatives which will become more readily available to consumers, including:
- Traditional modular homes
- Shipping containers
- 3D printed houses
- Recreational vehicles
It is also worth pointing out that tiny homes and these alternative models don’t have to be restricted to under 400ft². Flat packs and do-it-yourself tiny homes can be as big as 1,000ft², with some of the largest models housing up to 24 people.
It is clear that the tiny home movement is not just about going back to basics, but rather, about making home ownership a reality for everyone—potentially disrupting the current housing market in the process.
The question is not if tiny homes will become the new normal, but when.
Real Estate
Modular Housing vs. Traditional Housing: How Do They Compare?
Modular housing can be completed 40% faster and costs 10-25% less than traditional construction methods. Is the future of housing modular?
Modular Housing vs. Traditional Housing: How Do They Compare?
The U.S. needs new houses. Lots of them.
With housing prices nearing six times annual incomes, increasing supply is a must if there is any hope of bringing down house prices, and modular housing could be the solution.
This visualization is the third and final piece of the Reimagining Home Series from our sponsor Boxabl, where we compare the benefits of modular housing against traditional construction methods. Let’s start with the basics.
What Is Modular Housing?
Modular homes are built offsite, in standardized sections, usually in a factory setting. They are then transported to the building site and assembled on a waiting foundation. Once complete, modular homes look just like any other house.
Modular housing is not the same as manufactured homes, which are also sometimes called mobile homes. Like modular housing, manufactured homes are built offsite in a factory, but the key difference is that they can be moved after being assembled. Modular homes aren’t meant to be moved again after final assembly.
6 Ways Modular Homes Differ to Traditional Homes
The following benefits are based on information from the Modular Home Building Association, as well as a paper given at the 2020 Creative Construction e-Conference by members of the Department of Civil Engineering at the University of Texas at Arlington.
1. Speed of Construction
Because of the piecemeal nature of modular construction, many building activities can be done simultaneously, greatly reducing the overall time of completion. At the same time, because construction happens indoors, weather delays aren’t an issue. Overall, a modular housing project can be completed in 40% less time than using traditional building construction methods.
2. Cost Effectiveness
Standardization of design, less transportation of materials onsite, and the reduced impact of weather are some of the reasons that modular housing can be much cheaper than traditional building methods. According to the authors of the paper, there was a 10-25% decrease in construction costs for modular housing, again, compared to traditional methods.
3. Customizable
A common misconception is that modular housing isn’t customizable. While many manufacturers will often begin with a starter floor plan, they may also offer various customization options throughout the home.
4. Safety Record
Construction is a dangerous way to make a living. In 2021, construction and extraction workers held the number two spot for fatal occupational injuries in the U.S., with 951 work fatalities.
When you drill down into that number, construction tradespeople are in the majority, by far, with 726 that year alone.| Description | Fatalities |
|---|---|
| Transportation and material moving occupations | 1,523 |
| Construction and extraction occupations | 951 |
| Installation, maintenance, and repair occupations | 475 |
| Building and grounds cleaning and maintenance occupations | 356 |
| Management occupations | 323 |
| Protective service occupations | 302 |
| Production occupations | 242 |
| Farming, fishing, and forestry occupations | 218 |
| Sales and related occupations | 200 |
| Food preparation and serving related occupations | 101 |
| Office and administrative support occupations | 91 |
| Unknown occupation | 71 |
| Personal care and service occupations | 64 |
| Healthcare practitioners and technical occupations | 57 |
| Arts, design, entertainment, sports, and media occupations | 45 |
| Community and social services occupations | 40 |
| Healthcare support occupations | 32 |
| Architecture and engineering occupations | 29 |
| Business and financial operations occupations | 27 |
| Educational instruction and library occupations | 16 |
| Legal occupations | 11 |
| Life, physical, and social science occupations | 10 |
| Computer and mathematical occupations | 6 |
| Military occupations | 0 |
| Total | 5,190 |
Because modular construction happens in a controlled, factory environment, the number of accidents decreases by 80% compared to traditional building methods.
5. Environmental Impact
Anyone who has walked past a residential build site can testify to the amount of waste produced during construction. Modular construction is more efficient and therefore produces less waste. And because onsite construction is limited to assembly, there is less dust and noise. Carbon emissions are also 38% lower.
6. Built to Last
Modular housing is as good, if not better constructed, than many traditionally-built houses. The factory environment allows for superior quality control, and homes built this way use 15-20% more wood per square foot, which makes them stronger. Moreover, in a study commissioned by the Federal Emergency Management Agency after 1992’s Hurricane Andrew found that modular housing “performed much better than conventional residential framing.”
A Market On The Rise
Not only is modular housing cheaper and greener than traditional construction methods, it is also a market on the rise.
According to a recent report, the global modular construction market is expected to reach $54 billion by 2027, with a CAGR of 2.9% between 2021 to 2027.
Thinking Outside of the Box on Housing
Modular housing could be a solution to the housing affordability crisis not only in the U.S., but around the world. And with the global city population expected to hit 68% by 2050, it’s time to think outside the box on housing.
Boxabl uses advanced, mass production techniques to build and ship homes that significantly lower the cost of home ownership for everyone.
This is the final piece in the Reimagining Home Series from our sponsor, Boxabl. Be sure to read parts one and two on urbanization and affordable housing.
Learn more about how Boxabl is helping tackle the housing affordability crisis.
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