Modular homes are houses built in factories and then transported to and assembled at the housing site. Modular homes are different from mobile homes and site-built homes.

The term site-built refers to the construction of new houses in the open, at the housing sites, at the mercy of both the climate and the builder. They have to generally adhere to state, local and regional codes and specifications. For example, earthquake-prone areas may require special facilities. Such houses are also called stick-built houses and often have rising value in the real estate market - especially for site value.

Mobile homes are also completely factory- and offsite-manufactured, but are built on a non-removable steel chassis. They adhere to a federal code, called the Housing and Urban Development (HUD) code, rather than to the local codes where they move about. They are cheaper than site-built houses and modular houses, and decrease in value over time.

Modular homes, on the other hand, are built in sections in a factory. They are built to conform to all of the local, regional and state building codes for where they are finally located. Sections are transported from the manufacturing site to the building sites on truck beds and then are joined together by local contractors. The building is then laid out by a crane to an existing foundation.

Modular homes have several advantages that are making them increasingly popular. Modular homes tend to be twenty- to forty-percent cheaper than site built homes. This is because modular homes boast a variety of cost savings. The main reason for this is that large-scale manufacturers can get favorable terms for supply of materials in bulk.

Also, indoor manufacturing of the house components means that they are safe from problems related to weather and climate. This is a major problem of site-built houses, for which work is delayed often by weather or vandalism.

Waste from a modular home unit is miniscule compared to waste generated by site-built homes. Also, factory workers are highly trained for specialized manufacturing tasks. In comparison, site-building is entrusted to contractors who employ unskilled, temporary labor.

Modular homes are built in an offsite, quality controlled environment. The main advantage is that they can be built in half the time, while meeting the same quality standard.

Modular homes can be customer-designed. The time saving is immense: modular homes take thirty to ninety days for completion, compared to six to nine months for site-built houses. Typically, a two story, 2000 square-foot home can be constructed in a factory in a single week!

Modular homes are growing more popular by the day. In 2002, three percent of new homes in the U.S. were modular homes, and the northeastern states accounted for the highest modular home activity. The states in which modular housing was most popular were North Carolina, Michigan, and New York.