Manufactured housing communities poised for growth in 2026 as affordability crisis deepens
Manufactured housing communities (MHCs) enter 2026 with durable momentum, powered by unrelenting affordability pressures, steady operational outperformance and renewed transaction activity.
“Manufactured housing is not a niche anymore. It’s become a central tool in the national affordability toolkit,” says Jeff Benson, manufactured housing expert and Managing Director at Northmarq. “Data points show persistent demand and very little new supply, which is a recipe for continued strength in 2026.”
Demand is durable
In the first half of 2025, manufacturers shipped 53,800 homes – up 5% year over year, with 27,600 in second quarter alone – marking the second highest first half total of the past decade, behind only 2022.
“When the monthly payment is the decision maker, the manufactured option increasingly wins,” Benson notes. “Lower all in costs and faster delivery are compelling in a high rate environment.”
Occupancy and rents underscore tight conditions
National MHC occupancy held at 94.9% in second quarter 2025, 10 basis points higher than a year earlier. Regionally, Pacific occupancy reached 99% – with California near 99% for almost two years – while the South remained at 95.7% (Florida 96%) and the West climbed to 96.7% (up 50 basis points year over year).
Asking rents rose to $752 per month in second quarter, an increase of 2.5% quarter over quarter and up 7.0% year over year. Growth was strongest in the Southwest and West, led by Arizona (+9.8% YoY) and Colorado (+12.1% YoY).
“The sustained occupancy and steady rent growth we’re seeing reflects a structural supply-demand imbalance rather than a short-term cycle,” says Sam Neumark, Senior Vice President of the Manufactured Housing Group. “With new community development still extremely limited, manufactured housing continues to function as one of the most stable and resilient housing sectors in the country.”
Placement, not demand, remains the bottleneck
New community development is still constrained by local siting and zoning hurdles, keeping vacancy scarce and reinforcing rent growth.
“The fastest wins in 2026 will come from infill and expansions – using utility served land and right sizing approvals – while broader zoning reform continues,” Benson says.
Shipment patterns reflect where demand is being met. Texas led the first half of 2025 (~9,300 units), the South and Southwest captured the majority of new supply, and the Midwest posted a notable surge (+17% YoY), driven by Michigan.
Solid investment fundamentals, improving liquidity
After a quieter 2023 and early 2024, sales velocity in the first half of 2025 rose 66% from the prior year’s first half.
Average cap rates compressed to 5.9% (about 40 basis points lower than fourth quarter 2024), while the median price adjusted to $45,500 per space (down 11% YoY).
California and Florida led transaction counts, with Michigan re emerging at 7% of U.S. sales, consistent with its historic top five role.
“Operators are emphasizing operational excellence – home site activation, amenity reinvestment and measured rent policies,” Neumark points out. “With scarce new supply, internal value creation is the growth engine.”
The 2026 bottom line
With a structural housing deficit, minimal new community development and disciplined operating playbooks, MHCs are positioned to remain among the most resilient residential investments this year.
“Manufactured housing sits at the intersection of necessity and innovation,” Benson says. “In 2026, expect steady fundamentals, selective transactions and growing policy support to define the story. And watch for the sector’s share of the housing solution to keep rising.”