A prefab home that's been beautifully covered in snow and is being complimented by tall trees that surrounds it. Image provided by huntingtonhomesvt.com

Prefab vs Modular Homes: What’s the Difference in 2024?

A prefab home that's been beautifully covered in snow and is being complimented by tall trees that surrounds it. Image provided by huntingtonhomesvt.com
A prefab home that’s been beautifully covered in snow and is being complimented by tall trees that surrounds it. Image provided by huntingtonhomesvt.com

Housing is one of the most basic needs but also one of the most expensive. In 2021, 49% of Americans said that the availability of affordable housing is a major problem where they live. This is compounded by the fact that a single-family home’s national median sale price soared to $408,100 in the fourth quarter of 2021. This is a 25% jump from $327,100 in the fourth quarter of 2019.

One of the factors affecting the high cost of building a house is the prohibitive labor costs of traditional construction methods. This makes prefab and modular homes excellent alternatives because they are cheaper to build and entail lower labor costs. If you are unfamiliar with prefab or modular homes, this article explains these home types in detail to help you decide the best alternative housing choice. 

Modular and Prefab Home Overview

Many get confused distinguishing between a modular home and a prefabricated one. So, how are they different from each other? This section delves deeper into what’s a modular home and what is a prefabricated one. We will also analyze their advantages and disadvantages to help you identify which one will benefit you more. 

What’s a Prefab Home?

Prefabrication means making parts in a factory that can be assembled quickly or building something from these parts. Prefabrication homes is a general term referring to several types of buildings, including modular and mobile homes. Realistically, a prefabricated structure is made of parts by parts built in a factory. These parts are then delivered and assembled on-site. Once completely built, the finished structure is called a prefabricated building, be it a house, a commercial structure, an agricultural building, etc. 


  • They are affordable – Prefabricated houses are typically cheaper to build than traditional stick-built homes. Since the parts of a prefab house are manufactured in an off-site factory, a construction crew only needs to assemble the house, resulting in lower labor expenses. Mass-produced parts are also often cheaper, and prefab houses fall into the mass-produced housing category.
  • They are quick to build – Building prefab houses requires less building time than traditional site-built homes. If you are lucky enough to order a prefab home kit and there is a readily available kit, you just need to wait for the delivery of the kit and assemble it. This will dramatically reduce the construction time so you can move into your new home quickly. 
  • They produce less waste – Traditional on-site construction often produces more material waste than prefabricated construction. When building a construction site, you can expect excess materials or hardware, like scrap wood, excess nails, and electrical wires. There is also the possibility of having unused or damaged materials. 

    Prefab house manufacturing results in less material waste. Factories often reuse leftover materials to maximize their profits. Aside from saving you the trouble of disposing of this waste, you also do your share in helping conserve the environment. 
  • Quality control – Manufacturers of prefab houses follow strict quality guidelines in producing their kits. This can help ensure that the product you purchase is free from defects that may compromise your house’s durability and structural integrity. 


  • Delivery costs – Depending on how far you are from where the prefab house is coming from, delivery fees might bloat your expenses. You might be able to avoid shouldering delivery fees if you can purchase a prefab kit from a local supplier. If there are no prefab kit suppliers in your area, look at the delivery rates of various suppliers to compare delivery fees. This can help you reduce costs by choosing the supplier that charges the least fees. 
  • Assembly issues – Assembling a prefab house can result in defects. If you are hiring a construction crew with limited experience in assembling prefabricated houses, you run the risk of faulty assembly. This can result in faulty joints, damaged parts, leaks, and other issues that might affect the overall quality of your house. 

What’s a Modular Home?

There are several types of prefab homes, and a modular home is one of them. Modular construction entails securing several box-like structures called modules. These modules are then connected to make a single house or building. 


  • Shorter construction time – Modular houses require a shorter time to build. In fact, they are even faster to build than prefabricated houses. With a prefabricated house, there is a need to assemble multiple panels or pieces to complete the structure. A modular house often just consists of a module or two that you need to set down on a permanent foundation. 
  • Enhanced durability – Modular houses are more durable than prefabricated houses because they have fewer parts that require assembly. This reinforces the strength and durability of modular homes. 
  • Quality control – Just like with prefabricated houses, manufacturers of modular homes enforce strict quality control measures and safety standards within their factories. These measures can help ensure you receive a house free from factory defects and with maximum durability and stability. 


  • Payment issues – Since modular homes get delivered almost complete, most suppliers require full payment before delivery. This means you must have the full amount upon purchasing your modular home kit. 
  • Limited stock designs – There are fewer suppliers of modular houses compared to suppliers of prefabricated homes. This can limit your selection of stock designs and result in either of two things. One is that you might have to settle for a stock design that may not be exactly what you have in mind. The other option is to go for a custom design that is often more expensive and can blow your budget out of the water. 
  • Poor quality of modules – Although most manufacturers deliver excellent modules, it is possible to receive sub-par modules from some manufacturers. Aside from the modules themselves, make sure that you inspect the insulation, ventilation, and electrical system of the module you are buying. It is also helpful to research the reputation of the supplier you are buying from to avoid quality issues. 

What’s the Difference Between a Prefab Home and a Modular Home?

Let‘s take a more comprehensive look at the differences between prefabricated and modular homes. 

Needed Permits

Both prefabricated and modular houses require building permits. The requirements and documents needed to secure the permits will depend on your location, as counties can have different local building codes and requirements. 

However, modular houses entail fewer inspections than other types of construction, including prefabricated and on-site homes. Since a modular home is almost complete upon delivery, some inspectors might opt to conduct just one inspection. With prefabricated and on-site homes, the inspector might come back to check the project during different construction stages. 

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Method of Construction

Both prefab and modular houses are manufactured in factories. The primary difference is that prefabricated houses are manufactured in pieces, and these pieces and parts are assembled on-site. 

A modular home is manufactured as a module with fewer parts. If your modular home is small enough for one module, the module is set down and secured on a permanent foundation, and you move on to the finishing touches. 

With prefabricated houses, they may come in panels that the builder needs to assemble to form a complete house. 

Ease of Transfer

If you built your house in a temporary location, a modular house is easier to disassemble and reassemble into the new site. Disassembling and reassembling a prefabricated house will be more challenging since it has more parts. 

How to Choose Between a Modular and Prefab Home

If you are torn between building a modular and prefab home, how do you determine which one to choose? Here are some aspects you should consider when choosing between a prefab and a modular house. 


A prefabricated house is often cheaper than a modular house. You might want to consider this, especially if you are working on a limited budget. If you really want to get a modular house but don’t have enough funds to cover its construction, try applying for a loan or a mortgage from a local bank. You can apply for an FHA or conventional loan to cover construction costs. Approaching several banks or lenders can help increase your chances of getting the best possible interest rates. 


Both modular and prefabricated houses offer levels of customization that you can take advantage of if you want a one-of-a-kind house. However, since the number of prefabricated home suppliers outnumbers those of modular houses, you might have an easier time finding a prefab manufacturer to customize your home. This is basically a matter of convenience and a question of whether you are willing to work with a modular house builder from out of state to build a customized home. 


One advantage of prefabricated houses is that there is no limit to their size. You can specify the size you want, and the manufacturer will do its best to deliver your desired prefab house. This is not the case with modular houses. 

Since modular houses come in modules, the house size depends on the module that the manufacturer carries or produces. Modules are often between 12 feet and 13 feet wide, with the length varying per manufacturer. This means that the width will be in increments of 12 or 13 feet when combining modules. Unless you get a custom-made modular home, you will have difficulty getting a modular house of the exact width you want.  

If you get just one module, the resulting house might be too small for your needs. This type of home also presents a challenge when finishing the structure’s interior since you need to consider the size of the module when buying appliances and furniture. You will need to avoid oversized furniture and appliances so the interior spaces won’t get too crowded. 

Which is Better Between Prefab and Modular Homes?

Prefabricated and modular houses are both excellent choices if you want to build something other than a traditional home. Both types of homes have their advantages and disadvantages. Both are cheaper and faster to build than traditional houses. There are subtle differences when it comes to size and cost. The best thing to do is weigh these benefits and drawbacks and choose the option you like more. If you want to learn about other alternative housing options, like barndominiums, shipping container homes, and shouses, make sure you like and follow our Facebook page.