Prefab home

Prefab vs Modular Homes: Which Is Better?

  • Modular homes are a type of prefabricated home.
  • Prefab homes are different from modular homes. Some prefab homes are entirely built off-site, while modular homes come with pre-built modules assembled on-site.
  • Prefab homes are cheaper than modular homes, but modular homes remain more affordable than traditional build homes.
  • Modular homes have a higher quality, durability, and energy efficiency than other prefab home types. 

When we come across the terms prefab and modular homes we often wonder what the difference is. We often hear you can use the term prefabricated home or prefab home for a modular home, but you can not use the term modular home for a prefab home. Why is that?

The reason is that a modular home is a subtype of a prefab home. Although it may sound a bit confusing, they are not the same type of home.

Join us as we outline the differences between prefab vs. modular homes and the pros and cons of both. So, keep reading if you’re considering buying, building a new house, or elevating your existing home with an extra unit.

What Is A Prefabricated Home?

Prefab homes have been around for over a century. Even since the 1840s California Gold Rush, professionals have tried to find a way to build homes faster and in a more affordable way. Prefab homes have been rising in popularity in the 20th century and are now getting big in the US.

Believe it or not, 1.339M building permits were issued in the US in January 2023. So, now more than ever, the need for a quicker and more economical home is evident. But what is a prefabricated home more specifically, and can prefab homes become a substitute for the old-time home construction methods?

Traditionally, a home is built on-site, but prefab houses are made out of different parts produced in a factory or entirely built off-site and then carried on-site to assemble. It’s a more affordable and sustainable home option.

Types of Prefabricated Homes

There are several types of prefab homes, one of which was already mentioned, modular homes. We’ll get into the discussion of prefab vs. modular homes, but you need to know that modular homes are a subcategory of prefabricated homes. However, they are not the same. The other two types of prefab homes are manufactured homes and kit homes. All three types are shortly presented below.

  • Modular homes are assembled and constructed on-site with building parts and components that are prefabricated in a factory or other off-site location.
  • Manufactured homes are fully built off-site and then transported with a trailer. There is no on-site construction with the manufactured homes and usually are of lower quality than the other prefabricated homes.
  • Kit homes are mostly DIY projects a homeowner is willing to take. It starts with ordering a home that comes in pieces to assemble, similar to a puzzle or an IKEA DIY, and then you put it together

The most popular prefab home is a modular home, and many wonder what is the difference between modular and prefab homes, and which is better, prefab or modular homes. This is a tough one, but we’ll provide the answers further in the text.

Why Are Prefabricated Homes Necessary? 

Prefabricated Homes

As living costs continue to rise, the need for more affordable living also increases. Housing prices are through the roof in many areas of the country, and the need for an alternative is more than evident. That is where prefabricated homes come into place.

Prefab homes serve a good purpose in the present day, giving the opportunity to get a lovely home faster and a home that will be gentle to your budget. And although the battle between prefab vs modular homes continues, both options have a part to play in modern societies.

The traditional form and idea of a home are changing and adapting to how the world is right now. Some people seem to prefer the freedom and adaptability a prefab home would offer over going through the complex and lengthy process of building a house from scratch. Likewise, tiny houses have become a trend in the US and other parts of the world, both as main homes, detached houses, and side houses or additional units of an existing house.

Also, the needs of constructing or buying a completely new house include many aspects, such as building budget, time, efficiency, potential issues, permit fees, durability, and much more. And a prefab construction job can cover all of those aspects easily.

Prefab and modular homes both offer incredible benefits, but which fits your needs more? Let’s first look into the pros and cons of prefab houses vs. modular homes, so you can get to know your house purchasing options.

Pros And Cons Of Prefabricated Homes 


Faster and More Efficient Construction

Prefab refers to a prefabricated building method where a house can be constructed in half the time a traditional home requires. If a traditional house takes 7-8 months up to several years for more complex homes, a prefab home can be built in 3 to 6 months.

This is due to the efficiency of this construction method with the prefab homes definition of factory build components assembled at the homeowner’s property. In this way, all the outside factors, such as very high or low temperatures, or bad weather conditions are eliminated which helps the prefab home building process.

Less Costly

Prefab homes are generally much more affordable than traditionally built homes and a bit more affordable than modular homes.

Easily Transportable

You can move your home from one location to another if you ever want to move, allowing you to feel free.


Less Stable 

The other prefab home types are generally less stable than modular homes. This is because the manufactured homes are entirely built off-site, so if some adaptation is needed for the particular location, some issues may arise. Also, kit homes are generally not built by professional builders, which can result in a less stable house.

Less Durabile

The other types of prefab homes vs modular homes are a bit less long-lasting, due to the same reasons mentioned above.

Low Energy Efficiency 

Modular homes are still assembled and crafted on-site which allows the house to have more strength than other prefab homes, be more energy efficient, and provide a more eco-friendly living. 

What Is A Modular Home? 

Modular houses are homes constructed out of building parts called modules, which are the main difference between modular and prefab homes. The modules are built off-site, typically indoors, in conditions where the module quality is controlled. The modules are then transported to the construction site, where the parts are put together and installed onto the foundation.

Modular homes usually come equipped with plumbing, electrical wiring, stairs, and doors. Some modular homes may even come with flooring or some appliances.

The full process, from composing the modules in the factory to completing the work on-site, usually takes about 3-6 months. Setting apart a modular home from a traditional one is very difficult. There are strict requirements and quality control on these modular homes,so they are considered high-standard homes.

Also, modular homes are very customizable. You can fully design and carefully craft every inch of your new home. You can go for modular cottage homes, a nice big modular energy efficient house, a modular ranch house, a tiny modular home, a two-story modular house, and many more. The choices are endless. Customizability is also one of the significant prefab vs. modular homes differences.

Why Modular Homes Are Necessary?

As mentioned, the need for more affordable and faster build homes has been evident in the last few decades. The market size revenue of the prefab and modular homes industry together is $8.8bn in 2023 in the US alone. But the difference between the other types of prefab vs modular homes is the added value of the superior quality and longevity of modular homes.

Many people are still skeptical of these more modern housing options. Still, regardless of whether you are buying a new house, adding a housing unit, or renovating your existing home, failing to look at all the options and costs is one of the most common house renovation mistakes to avoid when undertaking a home elevation project.

Prefabricated modular homes provide many modern-day benefits and should not be overlooked in pursuit of buying and building a new home. So, are you interested in what are the pros and cons of modular vs prefab homes? Let’s dig into it.

Pros And Cons Of Modular Homes


Durability and Stability

Longevity is among the differences between prefab vs. modular homes. Other prefab home types, such as manufactured homes, are prone to acquiring more issues over time than modular homes.

Modular construction homes are tougher and an overall superior option regarding durability and stability. Modular homes are considered on the same level as traditionally built houses, in contrast to the other prefab home types.

Energy Efficiency

Energy Efficiency home

When you choose the right manufacturer, modular homes can be more eco-friendly and energy efficient than prefab homes and traditional homes. Modular homes often come with preinstalled heating and cooling, as well as various other energy-saving measures, like energy-efficient windows or thermal insulation.

Modular homes have fine air seals as everything is prepared, planned, and crafted perfectly beforehand. That is why modular homes are often considered green smart houses. The US residential sector is accountable for 21% of the total energy consumption, so having an energy-efficient home is an important global issue, especially with the current energy crisis.

Quality Control

The construction modules of the prefab modular homes are made in controlled factory settings, and the quality control is on point. All the materials are made and kept in a safe environment and, in addition, are not exposed to different weather conditions, as a traditional build house would be.


The new US housing trends are moving towards modular homes as a more affordable, faster, and customizable option. With a modular home, you can personalize the space to perfectly complement your needs.

The home design and layout can check off all the items on your checklist for house hunting. Another difference between prefab vs. modular homes is the size of the house. With a modular home, there are no limits on the house size, as with manufactured homes. Manufactured homes usually imply size limits due to the transport.



Modular homes are a bit more costly than the other types of prefab homes, however, they are still more affordable than a traditionally on-site build home.


Legally, the same building codes that apply to traditional homes also apply to modular homes from local, state, and regional regulations. The manufactured homes, on the other hand, are under the authority of the Department of Housing and Urban Development and do not have the same requirements as modular and traditional homes.

Accordingly, multiple permits, such as transport, building, occupancy, and utility connection permits apply to both modular vs. prefab homes. When you decide it’s the best time to purchase home, bear in mind to check out the exact permits you need depending on the specific state of residence, location of the lot, house type, transport, and similar.

Upfront Costs

When constructing a traditional house, you make the payments as the process goes by. With modular vs prefab homes, you have upfront costs, so the construction company can complete your order in the factory before they bring it on site.

Comparison Of Modular And Prefabricated Homes 

Prefab vs. Modular Homes

When we compare prefab vs modular homes, we can find many similar points and advantages. Although modular homes may be a bit more costly than other prefab homes, overall, they offer a greater value and are still more affordable than on-site build houses.

Accordingly, the resale value of modular homes is bigger, as they are regarded on the same quality level as traditional houses. The other prefab homes lose value faster over time. Modular homes are more energy-efficient, more durable, and allow size, look, and style customization, while other prefabricated houses do not.

Finally, if you are looking at the cheapest option, a prefab home is a very good option for you, as it comes with the best price and transferability. Still, if you’re looking for a higher quality home that is eco-friendly and long-lasting, a modular home is an ideal option.


1) What is the difference between modular construction and prefabrication?

Prefabricated houses are generally made completely off-site, while modular construction is assembled on-site with building modules that are made in a factory.

2) Are prefab homes cheaper?

Yes, prefab homes are a bit cheaper than modular homes, due to their lower durability. Modular homes tend to be sturdier, and more eco-friendly.

3) Are modular homes a good investment?

Yes, modular homes are regarded as a good investment. They are considered high-quality houses, like traditional homes, but come at a more affordable price and can be built in half of the traditional construction time.

4) What factors do I need to consider while buying a modular home?

Ensure that it fits your lifestyle, budget, timetable, preparation of the lot, acquiring permits, location, house design, etc. Buying or building a home takes considerable planning time, and all factors need to be considered, but the most important is to select the right manufacturer.

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