Researchers Shake Up American Dream? Rent vs. Buy, Ken Johnson, Florida Atlantic University, Exclusive to ManufacturedHomeLivingNews

For those who want the bottom line first, new university research reveals that manufactured homes could be a superior housing value when it comes to wealth creation.  With that executive summary, let’s dig into the details of the new research, and what the co-author of the university study specifically told MHLivingNews in an exclusive on-the-record statement.

On our sister site designed for investors, housing professionals, and those interested in public policy, we featured 3 videos at this link here.  Those videos take a look into what’s bound to become a red-hot topic in U.S. among housing professionals.

That ‘what the best value’ from an investment standpoint topic is as important to home shoppers as it is housing professionals and investors.

So for serious shoppers or researchers, you won’t want to skip any part of this, because what may appear problematic for conventional housing as an investment in some scenarios, actually could prove to be a surprise benefit for those who buy a manufactured home.  More on that point, later below.

Dr. Ken Johnson, Ph.D., Associate Dean of Graduate Programs, College of Business at Florida Atlantic University and his colleagues have done a new analysis on an issue that’s raised concerns by buyers and experts, notably in the last decade.  That question is this.

What’s Best for Creating Personal Wealth?  Renting or Buying a Home?

The American Dream of homeownership as the path to creating wealth may be due for a revision. A new study by faculty at Florida Atlantic University, Florida International University and the University of Wyoming finds that the property appreciation most homeowners expect when buying a home may be relatively meaningless in terms of building wealth,” said their release to MHProNews and others in media.

The video below from CNBC, which reviewed their research, and outlines the principles.


The researchers described their concept like this.

When considering buying and building wealth through equity appreciation versus renting and reinvesting in a portfolio of stocks and bonds, property appreciation does not change the results,” said study co-author Ken Johnson, co-developer of the Beracha, Hardin and Johnson Buy vs. Rent Index.

On average, renting and reinvesting wins in terms of wealth creation regardless of property appreciation,” Johnson said.

When you assume that those monies are reinvested at a rate of return, renting, on average, wins in terms of wealth creation,” Johnson said in their news release. “Of course, many renters will not reinvest those monies and will instead use them for consumer goods, which is the least desirable option in terms of building wealth.”

The video below is by FAU, and features Johnson’s commentary.

So one of the researchers’ keys concepts revolves around this question. Will someone be disciplined about investing what they don’t use to buy, in equities?

Their Rent vs. Buy formula, which was thoughtfully provided by Dr. Johnson to MHLivingNews, is summarized in the graphic below.


Manufactured Home Industry Question to University Researchers

In an emailed exchange of several messages with Dr. Johnson and one of his colleagues, MHLivingNews candidly questioned part of their research, because the figures that Dr. [Ben] Carson at HUD uses.  Namely, that the average home owner has $200,000 net wealth, vs. the average renter has $5,000 net wealth.”  That said, our publisher added, “I understand your nuanced point about the discipline of the renter in using funds to invest vs. whatever else, and how that should guide an individual’s leaning for or away from home ownership.”

We also provided the researchers with some links to MHLivingNews reports, and noted in a question thatThere’s nothing mentioned in your study in the PR about manufactured housing.”  Had they considered manufactured homes in their rent vs. buy formula?

There were, as noted, several messages.  Johnson considered, and then summarized his on-the-record reply to MHLivingNews with the following.

Our model for buy vs rent sets up a constant quality home.  We are able to do this with massive amounts of data from rent and housing price indices.  Thus, a renter and an owner live in the same/comparable property,” Johnson said as part of his exclusive message for publication to MHLivingNews.

Having said this, I think that it is fair to say that the lower the periodic cost of satisfactory housing, for a given individual/family, the greater the, on average, wealth creation, assuming investment of the savings from settling for a lower cost living alternate.”

For further background, see —

Best wishes.


Ken H. Johnson, Ph.D.

Associate Dean of Graduate Programs

Investments Limited Professor

College of Business | Florida Atlantic University


What Does Their Reply Mean to Manufactured Home Owners and Shoppers?

At MHLivingNews, we believe in accuracy.  We asked specific questions about how these university researcher findings apply to manufactured homes (MH), and MH buyers/owners.

The key part of their reply is thus this phrase:

“…I think that it is fair to say that the lower the periodic cost of satisfactory housing, for a given individual/family, the greater the, on average, wealth creation…”

Rephrasing that for clarity, for those shoppers who find that manufactured homes aresatisfactory housing,” there is a financial advantage to those who follow the researchers’ formula for the creation of personal wealth.

And isn’t that supported by common sense?  Isn’t that also supported by other third-party research, and federal data, like this factoid below from the federal GAO’s study of manufactured housing?

The GAO report that produced the graphic above documented the fact that manufactured homes are the most affordable kind of living. Less than rent, or other kinds of housing. For the full GAO report, click here or the graphic above. The Census Bureau data has noted for years that manufactured homes are about half the price of comparable conventional housing.

The less someone pays for housing, the more they have for everything else.

That ‘everything else’ would include wealth creation through investing.

We created a video several months ago for a sponsor that promotes the value of manufactured housing, which made the point about investing for retirement, along with other reasons that living for less can improve lifestyles at any age.  That promotional video is just 42 seconds.

Surprised by the Truth, While Shopping for a New Home

So, it’s fair and accurate to say that the keys come down to the quality of manufactured housing, is it satisfactory.  That’s a personal decision, as well as a factual one.  That’s why, over the years, we’ve had experts as well as home owners ‘testify’ to their knowledge, research, and experience.

One of those popular, expert videos interviews is shown below.


Let’s pair that expert view with this next one that’s an interview with engineer and his wife.  As with all of our videos, MHLivingNews offered and gave no compensation, and they are unscripted.  These videos and others reflects the thoughts of those speaking, stated in their own words.


We’ll plan to revisit this Beracha, Hardin and Johnson Buy vs. Rent Index research again. “We Provide, You Decide.” © (News, research, analysis, and commentary.)

SoheylaKovachManufacturedHomeLivingNewsManufacturedHousingIndustryDailyBusinessNewsMHProNews-Submitted by Soheyla Kovach to

Soheyla Kovach is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHLivingNews and

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