MH shipments continue to drop

The Census Department has numbers for shipments and placements of manufactured homes in the United States in 2006.  There are preliminary data for the first 11 months of 2007.  The numbers show that the crisis within the industry has not lifted.

In all, 117,300 homes were shipped in 2006. This was a drop off from 2005, when the industry moved 146,800 homes. It was not as much as in 2004, either, when 130,700 homes were shipped.

For 2007, 89,900 units were shipped in the first 11 months of the year.  December is not traditionally a barn burner of a year.  This means that there is a distinct possibility that fewer than 100,000 units will be shipped in 2007.  That would be the lowest number since shipments were first tracked back beginning in 1959.

The numbers include seasonal expectations. The suggestion is that summer and early fall should be a time of peak sale. That was part of the problem. While shipments were fairly high for low-volume periods in the winter months of early 2006, shipments fell far below expectations in the latter months of the fall. In particular, October appears to have been a bad month.

Some time has passed. I wonder how changes in the macro environment of our economy will influence these numbers. At the time, hybrid mortgages were making it possible for a lot of people to get convenient low-cost financing on single-family site built homes. Those products were freely available, but generally only outside of manufactured housing. Underwriting has been much more strict for manufactured housing. Declination rates are almost fifty percent.

Now there is a renewed sense of the need to utilize sober underwriting. There is a group of people on the margin who will not be allowed to utilize stated-income interest only products. Those people, faced with financing a site-built home on a fixed rate mortgage, will see the costs of their housing choice concurrent to their decision-making.

That’s a powerful factor in any decision-making framework. If car trips forced people to experience their transportation costs at the time of use, perhaps more people would use public transit. As it is, we buy insurance, pay for financing, and most maintenance on schedules that are entirely separate from when we get into the car. Public transit forces people to pay each time they use a trip — and so people actually come to see public transit as more expensive. Its all about out-of-the pocket costs.

Well, its going to become more that way in the near future with housing. I have to think that this is going to tilt in mh’s favor.