According to Census-based research, roughly 30% of Americans live in rural areas and urban clusters under 40,000 people. The other 70% live in larger metropolitan regions.
That simple statistic explains more about the modular industry than most feasibility studies ever will.
Because those two populations do not want the same thing.
And pretending they do is where confusion begins.
The 70%: Repeatability Wins
For the 70% living in large metro markets, modular construction almost always means repeatability.
Hotels.
Five-story affordable apartment buildings.
Townhouse clusters with 200 nearly identical units.
Mid-rise or high-rise multifamily projects.
In these environments, modular is a production solution.
Developers and investors I’ve spoken with over the past few years rarely ask:
“How can we customize every unit?”
Instead, they ask:
“Does modular cost less than what I’m building now?”
That’s the question.
Bedrooms, bathrooms, kitchen on the right or left — those are options. But the product is fundamentally standardized.
And that’s not wrong.
This is the home of repeatable modular production. Factories that serve this segment live on volume, capacity utilization, and backlogs that can stretch a year or more.
Margins are tight.
Schedules are critical.
Predictability is everything.
The 30%: Personalization Matters
Now let’s talk about the other 30%.
The families living near rural areas or in small communities of single-family homes do not dream about owning a unit in a five-story building that looks like 199 others.
They want a home with their stamp on it.
Even if your standard floorplan is 95% perfect, they want to tweak it.
Maybe it’s a larger project room.
Maybe it’s an office.
Maybe someone in the family has a disability requiring something unique.
Maybe the kitchen needs to shift because that’s how they’ve always pictured it.
The reason doesn’t matter.
What matters is control.
That segment expects flexibility. Not chaos. Not full architectural reinvention — but meaningful customization.
And here’s the interesting part: when done properly, those changes often produce better margins than the base model.
That’s not a weakness.
That’s a strategy.
Two Very Different Factory Models
In the U.S., we effectively have two dominant modular factory models.
1. The High-Capacity, Commercial Factory
These factories focus on repeatable modules in large clusters — 50 to 500 units at a time — destined for apartments, hotels, and large townhouse developments.
They survive on:
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Throughput
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Backlog
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Production efficiency
They are engineered for scale.
Low margin per unit.
High volume overall.
Tight schedules.
They must keep the line running.
2. The Custom Modular Home Factory
There are actually more of these across the country than the large commercial modular plants.
They work with builders constructing 5–10 homes per year.
They allow changes.
They encourage adjustments.
They refine plans until contracts are signed.
And when managed properly, customization isn’t an obstacle — it’s profit.
This model thrives on relationships and flexibility.
The Third Type: The One That Struggles
Unfortunately, there is a third model.The factory that tries to be both.
One month, a large commercial project ties up the line for three or four months. During that time, small custom builders wait. Some leave. Management pulls their hair out.
Because when the big job finishes, there may be a production gap before the next one begins.
Capacity planning becomes unpredictable.
Relationships strain.
Margins suffer.
Trying to serve both markets without structural separation often creates tension inside the plant — and in the sales office.
The Industry’s Real Challenge
These aren’t opinions.
They’re patterns.
The 70% market needs standardized, repeatable, cost-competitive modular solutions.
The 30% market demands controlled customization with profitability built into flexibility.
Both markets are legitimate.
Both markets are sizable.
Both markets can succeed.
The real question isn’t whether one is better.
It’s whether the industry can design systems — operationally and financially — that allow both models to thrive without stepping on each other.
Wouldn’t it be refreshing if someone brought a real structural solution to this instead of repeatedly pointing out the tension?
The divide isn’t going away.
Thirty percent of America still wants their own front door, their own layout, their own version of “home.” And seventy percent still wants scalable housing that works on paper and in spreadsheets.
The factories that understand which side they’re built for — and commit to it — will sleep better at night.
The ones that try to straddle both without a plan? They’ll keep pulling their hair out. The opportunity is sitting right there.
So is the problem.
Who’s ready to actually solve it?
Gary Fleisher—known throughout the industry as The Modcoach—has been immersed in offsite and modular construction for over three decades. Beyond writing, he advises companies across the offsite ecosystem, offering practical marketing insight and strategic guidance grounded in real-world factory, builder, and market experience.
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