What Are The Differences Between Prefab and Modular Homes?
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What Are The Differences Between Prefab and Modular Homes?

|May 11, 2023

If you are planning to build a new home or wish to get an extension in your existing home in the form of a backyard guest house, you must know about prefab and modular homes. Whenever people are planning a new home, they refer to prefab or modular homes interchangeably. However, what they forget is that both have slight differences. So, you must make a comparison of prefab vs. modern homes to decide which one to go for.

In this blog, we will help you make an informed decision by educating you about the key differences between prefab and modular homes. We have discussed what you can expect from a prefab and a modular home separately by talking about their pros and cons.

We have also given our final verdict on prefab and modular homes at the end of this blog. So, let's begin. 

What Can You Expect from a Prefab Home?

The term prefab home is short for prefabricated homes. Certain companies plan and construct these homes in factories and later transport them to whichever spot you desire. If you think of the material that is used for constructing them, you will usually find them made with lightweight materials like steel, aluminum, or timber. You can easily take inspiration from different shed house ideas to design one for yourself. 

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Pros of a Prefab Home

Here are some pros that you may expect from a prefab home.

Lesser Construction Time Required

Since most of the construction is completed in the factories, it won’t take that long to construct these homes. So, overall, the time that is required to construct these homes is lesser than traditional homes. 

Energy Efficient

Most prefab homes have an eco-friendly design and are made using recycled, environmentally friendly materials. They feature energy-efficient insulation, windows, and siding. Therefore, such small house kits require less energy to run.

Affordable and Cost Effective

The materials used in a prefab guest house are typically less expensive than those used in traditional stick-built homes, and construction times are shorter. So, people often consider them affordable and cost-effective. 

What Can You Expect from a Prefab Home?

Cons of a Prefab Home

Although people admire prefab homes for their pros, there are certain cons as well.

Lesser Design Flexibility and Customization

Since most of the designing of prefab homes is completed in the factories, you cannot make any changes to it once the construction begins. So, you cannot do much about the final design if you have ordered one. 

Several Hidden Costs

If your prefabricated home does not have electrical fixtures, you will have to invest extra bucks to make such installations. All these are the hidden costs that a prefabricated home bears. So, even though people believe they are less expensive, prefab homes might come with some hidden costs that you might not have considered otherwise. 

Size Limitations

Since these homes are built inside factories and transported via trucks, they have size limitations. You cannot expect a prefab guest house to be as big as a traditional home. This is the reason why people usually use them as small guest houses or extensions of traditional homes.

What Can You Expect from a Prefab Home?

What Can You Expect from a Modular Home?

Modular homes are a bit different from prefab homes. Although these homes are also built in factories, they come in different units. It won’t be wrong if we say that they are real-life LEGOs. They consist of several sections (modules) that you are supposed to assemble on-site to design a larger unit. The modules are typically built to conform to local building codes and can be made from a variety of materials, including wood, steel, and concrete. 

Pros of a Modular Home

Here are some pros that you may expect from a modular home. 

Greater Flexibility in Design

Since modular homes come in units, you have greater flexibility in design. You can arrange these LEGO-like units in any order you like. 


Since modular homes are themselves a type of prefab homes, they are inexpensive too. Therefore, people often find it affordable to get a modular ADU

Consistent Quality

Since most of the construction is completed in a controlled environment inside factories, modular homes are highly consistent in quality. So, it won't be wrong if we say you can expect great quality from these homes. 

Shorter Construction Time

Like prefab homes, modular homes require lesser construction time as well. In most cases, these houses can be set up within a week. All you need to do is select your desired guest house plans and go ahead with them. 

Higher Resale Value

Although previously modular homes had a lesser resale value, now these homes have a greater resale value than a traditional home. This is all due to the fact that their construction process has improved a lot over time. 

What Can You Expect from a Modular Home?

Cons of a Modular Home

Like prefab homes, modular houses have certain cons as well. So, you must know them to make a rational decision. 

Difficulty in Finding the Land

Modular homes bear an additional cost to buy and find suitable land. People often find it difficult to find the appropriate land where they can construct a modular home. Certain jurisdictions even ban modular homes, which makes it more challenging. 

Construction Limitations

Like prefab homes, modular homes are also built inside factories and are transported via trucks, so they have size and construction limitations. However, you can sort out this issue if you stack more modular sections.  

Final Verdict – Comparison Between Prefab and Modular Homes

Since you are aware of the pros and cons of prefab and modular homes separately, it's time for us to draw a comparison of prefab vs. modular homes. Talking in light of the pros and cons that we discussed above, you have more flexibility in design and greater customization options in modular homes.

If we look at most of the aspects, prefab and modular homes are not much different. Nevertheless, the only difference between prefab and modular homes is that the modular home is built entirely in factories, while a prefab home is designed using pre-constructed wall panels, walls, doors, etc.

Now that you have a holistic idea about prefab and modular homes, you can easily decide which one you should go for. Good luck!

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