Affordable Housing, Unaffordable Credit? Concentration and High-Cost Lending for Manufactured Homes

Sebastian Doerr and Andreas Fuster

No 20015, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Policy makers place high hopes in manufactured homes—the largest source of unsubsidized affordable housing in the US—to alleviate housing supply shortages. This paper shows that high market concentration in the multi-billion-dollar manufactured home loan market allows lenders to charge significantly higher interest rates than for site-built homes. Loan-level data indicate that borrowers in counties with higher lender concentration face significantly higher rates. Evidence from bunching at the regulatory HOEPA rate threshold, an instrumental variable analysis, and a difference-in-differences analysis around HOEPA's introduction suggests a causal link. We further show that integrated lenders, which play an outsized role in the manufactured home loan market, charge particularly high rates, and we provide evidence suggesting that these lenders exploit their market power over borrowers.

Keywords: Manufactured homes; Mortgage market; Competition; Household finance; HOEPA (search for similar items in EconPapers)
JEL-codes: G21 G23 L13 R31 (search for similar items in EconPapers)
Date: 2025-03
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