Fractional Homeownership, Manufactured Housing Likely to be Trends for 2023

The high cost of housing and rising interest rates are making fractional homeownership an appealing option — especially among the younger generation.

Seven out of 10 Americans believe that young adults have a more difficult time buying a house and saving for their futures than their parents did, according to a Pew Research Center survey.

Fractional buying and investing are expected to be among the trends for 2023, according to Daniel Smith, founder of the startup Keepingly, a centralized home management platform empowering homeowners at each stage of the homeownership experience.

“People are looking at their options and pooling together with somebody to make sure they can pay the mortgage and all the other bills — taxes, insurance,” Smith said.

Fractional real estate ownership is when a person splits the cost of a home purchase with several people, giving each a percentage of the ownership of the property.

Fractional ownership is different than a timeshare. When you buy a timeshare, you’re purchasing a specific amount of time to spend at the property. With fractional ownership, you’re buying equity.

Affordability is Key

The benefits of fractional ownership are that it’s more affordable than traditional ownership, it can provide a steady income stream, and you can get involved in higher-end properties.

But one of the biggest downsides of fractional ownership is that you won’t have as much control over the property as you would if you owned it solo. If you own a one-quarter share of a property, you only have a say in 25% of the decisions made for the property. It can also be more difficult to sell your share of the property than to sell the entire thing.

While some young people want to live in the properties they buy a piece of, others are buying fractions of properties as investments.

“Buying houses and flipping them is what some people do as a living,” Smith said. “Those costs are also rising and fractional ownership is a way to continue that model.”

In addition to fractional ownership, Smith predicts that manufactured housing will be a trend in the coming year — again, because of the rising cost of housing.

Manufactured housing already is viewed as a solution to the lack of affordable housing, with more than 22 million people in the U.S. living in manufactured homes, according to the manufactured housing institute. Manufactured housing accounts for 9% of new single-family home starts.

“Entire communities are being built around manufactured housing,” Smith said.

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