A report from Fitch Ratings says the manufactured housing sector, which historically has had "problematic performance," has been relatively stable in 2010.
Over the past year, the sector has seen only a very slight increase in loss rates and 60-day delinquencies, the ratings agency said Monday.
"Stable manufactured housing performance has been driven by consistent servicing, loan seasoning and continued reductions in new unit supply," Susan Hosterman, a Fitch director, said in a press release.
The percentage of loans more than 60 days delinquent has risen 20 basis points this year to 3.7%, Fitch said. Loss severities, meanwhile, have inched up to 81.5% from 79.8%, still well below the sector's peak average loss rate of 90% in 2003.
The performance of manufactured housing loans is "less susceptible to fluctuations in home-price trends than that of traditional single-family residential loans, since manufactured units are generally depreciating assets, even in a strong market environment," Hosterman wrote. "The length of residency in a unit results in increased incentive to continue to make monthly payments, even when there is little or no equity in the unit."
The number of new and repossessed manufactured housing units has dropped sharply since peaking in 1998 at 373,000 units. Last year the number of units shipped totaled 50,000 and that is expected to remain flat in 2010, Fitch said, as the availability of credit remains scarce. Vanderbilt Mortgage and Finance is the largest manufactured housing lender, Fitch said, with the rest of the market dominated by credit unions and local banks.
Fitch has ratings on 138 manufactured housing transactions with an original balance of $55 billion.