Why do people buy MHs in ~130k housing markets?

For example:

house mortgage at 130k - 5k down on a FHA loan (3.5% down) = $635 @ 30 years

home insurance = $100 a month or so

property tax = about $90

FHA mortgage insurance = $120 (for only putting 3.5% down)

Total = ~$945

Assuming they have 20% down, payments would be lower of course with additionally no $120 pmi fee. And of course if they are only in the 15% federal tax bracket, they’d get about $70 per month back on their taxes so it’d be either:

$945 - $70 = $870 and even only $750 (- $120) without FHA insurance.

Why do people choose to rent or RTO mobile homes for $600 - $700 in these markets? To me, the answer seems like they don’t want to make long term housing commitments, but then people that buy MHs tend to be long term tenants.

This is an easy one.

  1. People don’t have $5K to put down. $2K is hard to get.
  2. There is no tax benefit to home ownership anymore now that the standard deduction is $24,000 per couple
  3. They don’t have $945 - $600 = an extra $345/mo.


1 Like

Parallel to a park I was looking at, I saw homes on their 1/2 acre lots for 130k which inspired my curiosity. I have a hard time seriously believing most people wouldn’t consider saving for the 5k to get into buying the house. Having trouble making the few more hundred dollar difference makes sense, but from a park owners perspective, that’s likely somewhat scary to think how close to margins some people are living.

What did I read recently? Only 39% of Americans could come up with $1000 in an emergency.

Half of households make less than $60,000 per year nationwide…and it’s much lower in many areas. That’s a couple each earning $15/hr. x 2000 hrs./year each

One-third of households make under $40,000. That’s a couple earning $10/hr. x 2000 hrs./year each.

If you don’t have a high school diploma or you don’t have any special work skills, $10 is likely a typical “service industry” wage after you’ve been there for a couple years, and $15 is a higher-skilled office worker, assistant manager, skilled laborer.