News & Notes Archive - November 2005
Consumer Reports challenges the MH industry to making its housing a fair deal
In 2002 Consumers Union, with the help of a grant from the Ford Foundation, undertook an ambitious three year study of manufactured housing with the goal of providing buyers and home owners with important insights and information on many aspects of the home purchase and home ownership experience.
Taking the lead investigative role was CU’s southwest regional office in Austin, Texas. The south central and southeast regions of the U.S. comprise the largest market for manufactured homes and CU’s researchers found fertile ground. Over the ensuring three years CU issued a series of reports that documented many of the problems that have long been associated with manufactured homes as a so-called affordable housing alternative. Parenthetically, CU’s SW office staff was most helpful to me during my research for the Buyer’s Guide.
In an editorial this fall in Consumer Reports magazine, which CU publishes, the editors described the three-year study and challenged the MH industry to “make manufactured housing a fair deal.” Among the principal findings: the homes themselves have come a long way from their trailer house beginnings but the sales pitch remains right off the car lot, with retailers often refusing to disclose the actual sticker price of homes until they find out how much a home shopper can afford. CU urged a federal law to require price stickers on homes just as have been mandated for cars since the 1950.
CU also found that frequently buyers pay inflated prices, ending up with home loans that leave them owing more than the home is actually worth. Not only does this “negative equity” rob the homeowner of any chance of enjoying the asset appreciation typical of a conventional home, it makes it nearly impossible to sell the home.
Of particular concern to CU was the widespread occurrence of poor installation and set up of the homes, a leading cause of after-move-in problems. CU urged its readers to ensure that proper inspections are made prior to move-in, particularly in regions subject to hurricanes and tornados. Not only should such inspections be mandatory, buyers should resist dealer pressure to sign off on the release of loan funds until such inspections have been done.
Aside: Consumer’s Union and Consumer Reports don’t review or rate books, but on CU’s web pages devoted to manufactured housing, researchers described several books and pamphlets available to consumers. The Complete Buyer’s Guide to Manufactured Homes was described as “aimed at the reader who likes to know it all”...”[a] comprehensive book”...”well written with good detail, Grissim’s text has more meat than the other offerings and makes for a better read.”