Off-Site Construction

What's Standing in the Way of Home Builders Adopting Off-Site Methods?

Findings from Home Innovation Research Labs show home builders continue to embrace the status quo when it comes to adopting new methods, but results vary by builder type and region
Jan. 23, 2024
2 min read

The ongoing chronic undersupply of skilled construction labor has spurred renewed interest in off-site construction methods such as modular and panelization. But the shift from traditional construction methods to off-site construction in home building continues to face obstacles. The question is: Does removing barriers lead to accelerated market adoption of off-site methods?

To better understand that question and to help builders overcome hurdles to adoption, Home Innovation Research Labs has been investigating home builders' attitudes to off-site since 2020. Using nationwide surveys deployed in 2021 and 2023, Home Innovation sought to discover the top reasons keeping home builders from using off-site methods and how attitudes may be shifting. In survey results from 2021, the view that on-site building works fine and there's no need to change was the No. 1 reason given by respondents.

In September 2023, amidst changing market conditions, Home Innovation asked builders the same questions in a new survey. The “no need to change” response continued to top the list. Coming in at No. 2 was that the complexity/customization of the builder's new-home designs wasn't suited to off-site methods (45% of custom home and luxury builders selected this as one of their top three reasons, while 26% of production builders did), followed by off-site's lack of on-site adaptability for last-minute changes in the No. 3 spot, and negative homebuyer perceptions of off-site methods in fourth place.

... Because the respondent profiles were very similar, we can conclude that large differences between the two years indicate directionality of a trend. For example, two barriers rose substantially in the ranking during the 2 year period: home buyers not accepting offsite rose from the #4 position to #3. This can be readily explained that the rising interest rates over the past 2 years have put many lower-end buyers out of the market, who are typically younger and have less bias against offsite-constructed homes. This should resolve as entry-level buyers return to the market when interest rates decline. Rising from 7th position to 5th was local logistics issues.

There were also a few that fell in the rankings during the past 2 years: the barrier of adopting offsite as a major time commitment fell from the 11th place to 9th place —understandably because many builders’ production volume has declined over the past 2 years and allowed them to adopt construction practices they have previously avoided.

Read more about the research findings

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