Macroeconomic Highlights

The broader economic environment in Q3 2025 showed steady improvement, creating a more supportive backdrop for real estate performance across all major sectors. Inflation continued to cool and interest rates stabilized, giving both owners and investors greater clarity around financing and asset values. Limited new development—whether in housing, healthcare, or storage—remained a defining theme, helping strengthen occupancy, restore pricing power, and improve revenue trends. Consumer mobility and household formation showed modest gains, supporting leasing momentum in storage and consistent demand in manufactured housing, while demographic-driven needs continued to underpin healthcare real estate. Although operating costs such as taxes and utilities remain elevated, disciplined management and healthier revenue growth helped offset those pressures. Overall, the quarter reflected a market that is rebalancing, with fundamentals moving in a more constructive direction heading into 2026.

Inflation and the 10-Year Treasury Since 2022

Inflation and the 10-Year Treasury Since 1962

Q3 2025 Manufactured Housing REIT Data Overview

Q3 2025 Manufactured Housing Operating Fundamentals

Manufactured Housing Rental Rates

Across the sector, rental rate performance remained solid and consistent, supported by strong demand and healthy renewal trends. Sun Communities reported that half of its MH residents have received 2026 rent increase notices averaging approximately 5%, reflecting stable fundamentals and resident retention. Equity LifeStyle Properties (ELS) issued 2026 MH rent increase notices to 50% of its residents with an average increase of 5.1%, and noted particularly strong market conditions in Florida, where new homebuyers experienced 13% mark-to-market rent increases. UMH Properties highlighted continued progress in its value-add strategy, noting that repositioned communities in Georgia are expected to achieve monthly rental rates in the $1,000–$1,200 range once stabilized. UMH also anticipates a 5% annual rent increase, which is expected to generate approximately $11 million in additional revenue as these increases take full effect. 

Rent per Site (Same Store)

Manufactured Housing Occupancy

Manufactured housing occupancy remained exceptionally strong, demonstrating the resilience of the asset class and the continued shortage of attainable housing across the country. Sun Communities maintained 98% occupancy in its MH portfolio, supported by consistent demand throughout North America. ELS reported high occupancy levels in its largest markets, including 94% occupancy in Florida and 95% occupancy in Arizona and California, driven by migration trends and the appeal of amenitized, well-located communities. UMH Properties continued to show meaningful occupancy improvement, increasing same-property occupancy by 132 units sequentially and 357 units year-over-year. UMH’s rental home occupancy remained steady at 94.1%, and with 400 homes on site (including 100 ready for occupancy and 300 being set up), plus 200 additional homes on order, the company is positioned for further occupancy gains as new homes are delivered and leased. 

Period Ending Occupancy (Same Store)

Manufactured Housing Income & Expenses

MH income growth was a major contributor to operating performance across all three companies. Sun Communities delivered 10.1% same-property MH NOI growth, reflecting robust rate performance and stable occupancy. ELS generated 5.5% growth in community-based rental income and 5.3% NOI growth, supported by a combination of renewal rate increases, market rent achieved on turnover, and disciplined expense management—including lower real estate tax expense and payroll efficiencies. UMH reported 9.4% same-property rental income growth and 12.1% same-property NOI growth, with its operating expense ratio improving to 39.7% from 41.1% in the prior year. UMH also continued to benefit from its rental home strategy, converting 227 homes during the quarter and 523 year-to-date into revenue-generating units, increasing both rental income and overall community performance. 

YoY Rental Income Growth (Same Store)

YoY Expense Growth (Same Store)

YoY NOI Growth (Same Store)

Manufactured Housing Investment & Transaction Activity

Investment and expansion activity remained strategic and selective, with a focus on enhancing portfolio quality and long-term growth. In October Sun Communities completed the acquisition of 14 communities for approximately $457 million, including 11 manufactured housing communities, all located in existing markets to maximize operational leverage. UMH Properties executed on its value-add acquisition strategy, purchasing two Maryland communities totaling 191 sites (79% occupied) and a 130-site community in Georgia (32% occupied), bringing its year-to-date acquisitions to 587 sites across five communities for $41.8 million. UMH also emphasized the depth of its internal growth pipeline, including 3,500 vacant lots, 600 recently constructed expansion lots, 329 joint-venture sites, and 2,300 acres of developable land, all of which support sustained long-term occupancy and revenue growth. ELS continued its expansion initiatives as well, completing the final phase of a 170-site expansion at Clover Leaf Farms, with the first phase already approaching full occupancy. 

Acquisition Dollar Amount History

*Excludes Sun Communities Acquisition of Park Holidays in April 2022 for $1.2 Billion

Manufactured Housing Cap Rates & Bid-Ask Spread

Financing conditions for high-quality manufactured housing assets remained favorable. ELS noted that lenders continue to show strong appetite for the sector, with 10-year loans generally priced between 5.25% and 5.75%, 60%–75% loan-to-value, and 1.4x–1.6x debt service coverage. The company highlighted that age-qualified and high-quality MH communities continue to command the most attractive financing terms, indicating sustained lender confidence in the stability and long-term performance of the asset class. Transaction markets remained highly selective, with Sun Communities noting that its acquisition funnel was large but that only a small percentage of reviewed opportunities met long-term underwriting criteria—reflecting a disciplined approach in an environment where seller pricing expectations remain elevated. 

Implied Cap Rate History

*The implied cap rate data indicates the market value of each REIT.   

The implied capitalization rate is a culmination of the company value and total debt of each company divided by its NOI. 

Enterprise Value History

Headwinds in the Manufactured Housing Market

The sector continues to experience pockets of operational and macro-driven pressure. Sun Communities reported lighter home sales activity due to broader macroeconomic softness, particularly within its U.K. operations. ELS discussed a notable decline in Canadian seasonal and transient RV reservations—approximately 40% lower year-over-year—which is expected to impact near-term seasonal revenue for properties with RV components in the fourth and first quarters. UMH highlighted that some Southeastern markets continue to rely on legacy “resident-owned home” models, requiring significant investment to transition communities toward rental homes—an effort that temporarily affects initial occupancy at newly acquired, low-occupancy assets. Additionally, ELS noted that permitting and administrative delays have slowed the pace of development and expansion in certain markets, extending the time required to bring new MH sites online. 

Tailwinds in the Manufactured Housing Market

Long-term demand drivers for manufactured housing remain exceptionally strong. ELS underscored the national housing shortage and highlighted that modern manufactured homes cost approximately 60% less than comparable site-built homes, offering meaningful affordability advantages. The company also emphasized the size of the demographic opportunity, with nearly 70 million Baby Boomers and 65 million Gen X households representing core segments seeking high-quality housing at attainable price points. Sun Communities continued to benefit from 98% MH occupancy, strong renewal trends, and consistent NOI growth—reinforced by the essential nature of the product and limited new supply in most markets. UMH cited strong home sales demand, a substantial inventory of vacant sites, and large amounts of developable land that support sustained organic growth. The company also referenced emerging legislative initiativesthat may expand resident financing options and improve access to long-term capital for MH operators, creating additional tailwinds for both affordability and portfolio expansion. 

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