"Manufactured housing ... can deliver very good value to home purchasers," he explained in his 2003 shareholder letter. "Indeed, for decades, the industry has accounted for more than 15% of the homes built in the U.S."
Good timing by a famed contrarian? We'll see. Industry shipments rebounded in 2005 -- but then crashed last year to the lowest point since 1961. Mr. Buffett's Berkshire Hathaway has fared better, with unit sales of mobile homes rising 10% in the first nine months of 2006.
Last year, mobile-home shipments -- a parade of 117,300 trailers lumbering behind signs of "Caution: Wide Load" -- accounted for less than 7% of new homes completed in the U.S., according to American Demographics' review of Census Bureau data.
Mobile homes are a weak spot in a housing market showing some signs of recovery. But 6% of U.S. households -- 7 million families -- live in mobile homes, including 10% of families in the South and 19% of households living outside of metropolitan areas, according to Census data.
New mobile homes sold for an average of $64,000 late last year vs. a median price of $235,000 for a newly built house, according to the Census Bureau. For millions of families, mobile homes offer an affordable way to the American dream. Consider that 80% of families living in mobile homes are owners rather than renters.
Nationally, Census data for fourth quarter 2006 show that a near-record 68.9% of households owned their homes (including single-family homes, condos, co-ops and mobile homes). Ownership varies greatly by state, tracking to some degree with housing affordability.
The two states with the highest percent of homeownership are West Virginia (81% of households owned homes in 2005) and Mississippi (79%). Those two states have the nation's lowest-priced houses, with an '05 median value below $85,000, according to the Census Bureau's American Community Survey. Not coincidentally, they are the poorest states in the nation.
The lowest homeownership rates? New York, California and Hawaii -- all below 60%. California has the most costly real estate (median home price in '05: $477,700), followed closely by Hawaii. (New York state was a relative bargain with a median home value of $258,900.)
Not surprisingly, size of houses ties directly to income; richer families have bigger houses. More intriguing, though, is that the age of a home correlates with the income of its occupants; the richer a family, the newer the house.
Families making more than $120,000 on average live in homes built in 1979, a decade newer than the homes of poor families. One possible explanation: Newer homes tend to be bigger than homes constructed decades ago (see "Lots of Space"), and richer households gravitate to bigger spaces.
When the Census Bureau asked homeowners to assess on a 1-to-10 scale their overall opinion of their home -- factoring in good points such as amenities and troubles like bad plumbing -- 80% gave their home an 8, 9 or perfect 10 score (with 10 the most-cited response). When asked for an overall opinion of their neighborhood, 75% offered an 8, 9 or 10 (with 10 again the most-cited response).
Home and neighborhood grades in the Northeast, Midwest, South and West were pretty even. That's good news: For most families, there is no place like home.