What Exactly Are Prefab Houses?

There are a lot of jargon-y terms to learn if you’re interested in architecture and real estate. So, you’re probably not the only one who’s been puzzled by the mention of a “prefab” house.

Generally speaking, a prefab is a house built from parts that have been prefabricated in advance at a factory or workshop and then shipped to a building site to be constructed.

“Assembling a structure from components produced offsite is the most easily understood definition,” explains real estate broker Gerard Splendore of Warburg Realty.

Traditional “stick-built” or “spec” construction methods involve constructing mostly everything on-site, which means the final price and finish date are often moving targets. Prefab construction works out all the details beforehand so there’s much less guesswork. This cuts down on the time, cost, material waste, and labor involved. “Overall,” says Splendore, “in comparison with stick-built houses, the price of a prefab house can be 25 to almost 50 percent more economical.” 

Another key difference is that prefab houses are paid for prior to construction. Like a package from Amazon—and in fact, there are prefab houses sold on Amazon—once you buy the house, its parts are shipped directly to wherever it is going to be built.  

Though innovative, this is certainly not new. Prefabrication building techniques were used in Mesopotamia and ancient Rome. Examples are also abundant throughout modern history—from 1624 when a panelized wood structure for a fishing fleet was prepared in England and constructed in Massachusetts, to 1889 when the Eiffel Tower in Paris was erected from prefabricated iron pieces, to the early 20th century when Chicago-based Sears, Roebuck and Company sold nearly 75,000 homes through its mail-order Modern Homes program.

Today, what most people think of when they envision prefab are panel-built homes. This is when the structural pieces for a house, which has a design typically focused on simple proportions, clean lines, and durable materials, are pre-cut and fitted at a factory and shipped to the construction site to be assembled there. Modular homes, another example, are prepared at a factory, too, but they are also mostly built there into blocklike structures (like shipping containers) that are then assembled at the site. 

To get technical, these two types—panel-built and modular—are actual houses, meaning they gain value over time and need to adhere to all building codes. Another is manufactured homes (sometimes referred to as mobile homes), which are built entirely offsite and have wheels that help transport them. These are considered personal property and only have to comply with less strict rules set by the Department of Housing and Urban Development (HUD). As for tiny homes, if they are under 400 square feet, they are off the hook from HUD rules at the moment.

Prefab homes are for people who want a nicely designed house produced in a straightforward, environmentally friendly way, but don’t have the budget for a custom design by an architect. Gordon Stott, co-founder and partner at Connect Homes, a prefab house company in Los Angeles, says, “What I’m most proud of is how we’ve turned residential architecture (something that’s typically only for the very wealthy) into a product that more people can afford. When an object goes from being ‘bespoke’ to being built on an assembly line, manufacturing efficiency goes way up, costs come way down, and the resulting ‘product’ becomes more affordable to the middle class.”

Take a look at some of the upscale versions prefab companies are producing today and you’ll see these houses are aesthetically appealing and avant-garde as well. Connect Homes, for example? It makes beautiful structures with undeniably cool California flair. Meanwhile in Hawaii there’s Bamboo Living, which sells prefab houses designed with bamboo, a highly sustainable and innovative material gaining more and more recognition in the design world. And up in Maine, GO Home has a line of attractive prefab passive-house dwellings that perform at the height of efficiency. 

So, if you’re in the market to build a new house, knowing the term “prefab” is a good thing.