The general rule of thumb is that prefab construction is cheaper than stick-built homes by an average of 10 to 25 percent. Why? Mass-produced materials on an assembly line cut down costs because factories buy supplies in bulk.

The cost of labor is also less because you don’t have to send carpenters, plumbers, and electricians to individual construction sites. And a faster build time saves money too.

You can expect to pay a starting cost of anywhere from $150 to $400 per square foot, and this price can sometimes (but not always) include the home’s interior fixtures. You should pay attention to whether your prefab package includes appliances, windows, flooring, insulation, wiring for electrical, and doors.

Beware, however, that the sticker price of a prefab home isn’t actually how much that home will cost. First, you have to pay for the land to build the house, and you’ll also have to account for soil testing, site surveys, permits, and utility hookups. Preparing the site for construction can be either relatively minor or very expensive depending on the landscape; prefab packages also usually don’t include the foundation.

Other costs might include landscaping, driveways, garages, and the cost of a local contractor or builder to finish the home. All of these expenses vary—a plot of land and a contractor just outside Boston could be much more expensive than in rural South Carolina, for example.

How long does it take to build a prefab home?

Depending on the size and finishes of your prefab, you can build a home in as little as three months. Most prefab homes can be built in four to six months from start to finish. This is much faster than traditional homes, which average about eight months to build, and in some markets, custom home construction can drag on for years.

Why is it up to 50 percent faster? Building most pieces in a factory limits weather delays, makes construction more efficient, and creates predictable delivery dates. You also don’t have change orders or as many labor scheduling conflicts. That being said, the prefab permitting process can be lengthy in some regions, adding time to the estimates above.

Is prefab more sustainable than traditional homes?

Prefab is generally considered more eco-friendly than traditional stick homes.

First off, the prefab construction process produces less waste. Instead of having lots of different people delivering materials to a site and producing excess wood, tiles, and trash, factories are more efficient. Prefab companies are also more likely to reuse or recycle their waste at a factory.

Factory-built homes and parts may also have tighter seams than stick homes, which makes heating and air conditioning more efficient. And prefab companies are more geared toward eco-minded packages than many spec home builders; most prefab builders offer energy-efficient appliances, while some include sustainable materials (think: bamboo flooring) and add-on amenities like solar panels and rainwater collection systems.

And in an era of increasing climate challenges, prefab construction scores another point due to its resiliency. Because prefab homes have to withstand being transported by truck, they are often structurally stronger than stick homes, a major plus in regions prone to earthquakes, hurricanes, or high winds.


Can you customize a prefab home?

Yes! Depending on the company you choose, there are various ways you can customize your prefab. Most builders offer different finish packages or upgrades, and some will allow different layout configurations, but beware that these changes could raise the price of your home.

Can you finance a prefab home with a traditional mortgage?

The main difference between financing a prefab home and a prebuilt home is the down payment. Before you choose a prefab manufacturer or plot of land, you need to know how much home you can afford. Your loan will need to factor in all the costs of construction—including the price of the land, the home, and any finishes.

Once you contract with a home manufacturer, the actual financing of a prefab house is similar to stick-built homes. But because you’ll be using a home construction loan, these often require a greater down payment than pre-built homes—you’ll likely need to put at least 20 percent down. Once construction is complete, most banks will approve a construction loan that transfers to a permanent mortgage.