The Implications Of The “Housing Bubble” Bursting On The Mobile Home Park Industry

Jerome Powell with the Federal Reserve has raised interest rates around 4 points in 2022 – the fastest such increase in 40 years. And, predictably, this is causing widespread disaster with the single-family home industry, which had experienced 14 straight years of world-record low home mortgages. So what’s the impact going to be on the mobile home park business when the single-family bubble bursts?

How single-family home prices became a bubble

Following the 2007/2008 sub-prime home lending debacle, you would think that people would have learned their lesson. But American homeownership is such a strong desire that the average household just can’t help themselves. Loans were available at incredibly low rates (the lowest in U.S. history) and people took those lenders up on the offer. Then you add in the Covid pandemic in 2020 and millions of Americans living in the big city suddenly realized that they could have a higher quality of life in the suburbs and exurbs and they couldn’t ditch the urban core fast enough. As a result, buyers were willing to pay more than asking prices, blindly getting involved in bidding wars that broke all home price records.

How it “burst”

Like a jet flying at Mach 2 three feet off the ground, it didn’t take much to crash the plane. And that catalyst was the Federal Reserve which suddenly responded to the highest inflation rate in 40 years by raising interest rates around 4 points in 2022 – also the fastest increase in 40 years. Since the single-family home market is based on debt with the average U.S. household holding a sizable mortgage on their dwelling, the increase in interest rates makes home payments escalate substantially – effectively doubling them in less than a year. Since mortgage monthly amounts doubled, the amount of home that the buyer can quality for roughly halved. That means that all those crazy-high prices cannot possibly be supported and a huge number of Americans will now be upside down with their homes. Additionally, you can’t build new homes in this environment, so the entire home building, mortgage and ancillary services are facing one of the worst economic challenges in 14 years.

What this will do to the mobile home park business

So what happens to “trailer parks” when single-family homes get wrecked? The answer is complicated and not what you would anticipate. Mobile home parks are somewhat insulated from the home building industry as mobile homes are chattel property and not part of the traditional mortgage industry. The only real impact on mobile homes is that they become more attractive to consumers as that 10% chattel mortgage rate is looking much more attractive when single-family home mortgage are at 7% than they did when they were at 3.5% back in January. The big issue is that mobile home parks are contrarian by nature as affordable housing gets hotter when the nation gets poorer – no different than the climb in demand for Dollar Stores and Dollar General.

Lessons learned from 2007/2008

You don’t have to look much farther than the Great Recession of 2007/2008 to see in real-time the impact of what’s happening now. As the nation shifted from an “owner” focus to a “renter” focus by losing their homes and having to rent housing, the supply/demand formula went crazy and apartment rents skyrocketed to what is now roughly $2,000 per month on average. Since mobile home parks are in direct competition with apartments and offer the only affordable detached dwelling with yard, the run up of apartment rents yielded much higher mobile home park lot rents. In fact, some would say that the Great Recession was the best thing to ever happen to the mobile home park industry. They would be correct.

How to position yourself

In every recession there are winners and losers – the key is how you position yourself. So how should you maneuver going into the next housing recession? Here are some ideas:

  • Learn the correct way to invest in mobile home parks. You need to be competent in how to identify, evaluate, negotiate, perform due diligence on, renegotiate, finance, turn-around and operate these properties. Your best source is the Mobile Home Park Investor’s Boot Camp which is a live yet virtual event that next meets on January 13th to 15th. More information HERE.
  • Define a territory. Most buyers should focus on a 4 to 5 hour driving radius from their house so they can go out to a target park and back in one day.
  • Select markets that have “recession resistant” economies. This is a big deal when you are entering a period of U.S. economic uncertainty. There are three basic industries that do well regardless of the U.S. economy: 1) healthcare 2) education and 3) government. The dangerous markets are single-focus private businesses that might close down and kill the market.
  • Immerse yourself in listings and finding deals to review. The best way to find a good deal is to sort through as many as you can find. On-line listings, brokers, direct mail and cold-calling are the preferred methods.
  • Start making offers and learn from every seller you talk to. Every time you find a deal that has the right characteristics, you should make an offer regardless of what the seller has it priced at. You gain valuable experience through interacting with sellers and their response will often surprise you. I once bought a park at 50% off even though it was marked “firm”.
  • Think like a deal-maker and not a deal-killer. Anyone can kill a deal. But there’s no money in that. Instead, look at every deal as a glass half-full and say “what would it take for this mobile home park deal to work?”
  • Have faith in your timing, because it’s excellent. The best time to buy assets is during recessions as it drains all the "fluff” out of things. Additionally, recessions fuel higher lot rents. Those who bought mobile home parks immediately following 2007/2008 did incredibly well.


The single-family home market is entering a massive correction. That’s great for mobile home parks. Put yourself into position to profit from the U.S. economic recession that is being triggered now. Even though the stock market will be heading down, this is an alternative investment niche that has proven credentials in down cycles.

Frank Rolfe
Frank Rolfe has been an investor in mobile home parks for almost 30 years, and has owned and operated hundreds of mobile home parks during that time. He is currently ranked, with his partner Dave Reynolds, as the 5th largest mobile home park owner in the U.S., with around 20,000 lots spread out over 25 states. Along the way, Frank began writing about the industry, and his books, coupled with those of his partner Dave Reynolds, evolved into a course and boot camp on mobile home park investing that has become the leader in this niche of commercial real estate.