Two homebuilders have teamed up on a Tennessee neighborhood of 264 manufactured homes. The concept is a way to increase the supply of affordable housing, local officials say.
Clayton and Cook Bros. Homes said prices at Harvest Meadow in Knoxville, Tennessee, near downtown, start in the low $300,000s, well below the U.S. median home price of $422,800 in May.
Roughly a dozen homes are already built, with more scheduled to be completed in phases throughout this year and into 2026, the builders said.
The U.S. Department of Housing and Urban Development regulates manufactured homes. Builders assemble manufactured homes in a factory and deliver them to the lot.
In recent years, record home prices, mortgage rates near or above 7% and rapidly rising property insurance costs in some coastal areas have shut out many young professionals from homeownership. The share of first-time homebuyers in the overall buying pool reached an all-time low of 24% between 2023 and 2024, according to the most recent figures from the National Association of Realtors.
Last fall, HUD updated manufactured housing guidelines to allow builders to include up to four dwellings within one structure. It was one of the agency's most extensive updates for the housing type in more than three decades.
The concept allows builders to construct homes more efficiently and at a lower cost and to provide "attainable, energy-efficient homeownership for more home buyers," Clayton CEO Kevin Clayton said in a statement. He also said the company expects to build similar developments nationwide.
At Harvest Meadow, homes must meet U.S. Department of Energy requirements for manufactured housing, the builder said.
As for the Knoxville market, it has been among the national leaders in home value appreciation over the past five years.
The city ranked third in the U.S. with average home appreciation of 87.4% from 2020 to the first quarter of this year, according to Federal Housing Finance Agency data. Hinesville, Georgia, a military city about 45 miles southwest of Savannah, led with a 90.1% increase, and Pinehurst, North Carolina, was second at 88%.
Knoxville's home prices also stack up favorably over the longer term. Over the past 25 years, the city's inflation-adjusted price appreciation was 55.77%, ranking third behind San Jose, California, and Los Angeles, according to research by professors Ken Johnson of the University of Mississippi and Eli Beracha at Florida International University.