👋👋 Good morning real estate watchers! Today, we are going to talk about how Brookfield is spending $10 billion on manufactured homes. Which is ironic, because that’s the same amount most Americans need just to buy a regular house with a working bathroom in San Francisco.

But first, here’s what we’ve been paying attention to this week…

1️⃣ Rent Descent: August 2025 marked the 25th straight month of year-over-year rent declines, with the U.S. median asking rent at $1,713—down 2.2% annually but still 17% above pre-pandemic levels. Despite softening prices, renters are increasingly mobile, with many eyeing larger spaces, affordability, and even homeownership within the next two years. (Realtor.com)

2️⃣ Flip Flop: Home flipping profits sank to a 17-year low in Q2 2025, with typical returns at just 25.1% (down from nearly 63% in 2012) as rising acquisition costs squeeze margins. Despite a record-high median purchase price of $259,700, flippers netted only $65,300 per sale, a sharp drop from last year’s gains. (ATTOM)

3️⃣ Payback Time: Wages rose 4.1% year over year, outpacing rent growth at 2.6% and mortgage payments at just 0.2%, giving renters and buyers rare breathing room. Economists caution that years of pandemic-fueled housing cost spikes still keep ownership out of reach for many families. (Redfin)

4️⃣ Blueprint Breakthrough: Women now make up 11.2% of the construction workforce (about 1.34 million) the highest share in two decades. This surge reflects both white-collar opportunities in the industry and the push to ease a persistent skilled labor shortage. (NAHB)

5️⃣ Start Stop: Housing starts fell to 1.31 million in August, down 8.5% from July and 6% year over year, as builders pulled back amid weak sales and high costs. While permitting also declined, easing mortgage rates may offer a glimmer of hope for future demand. (Zillow)

TOP STORY

On a quiet block in Denver, families stroll past rows of manicured lawns and modest homes. What looks like a traditional neighborhood is, in fact, anything but: many of the houses were shipped in on flatbeds and assembled like Lego sets. This is Yes! Communities, one of the largest manufactured housing operators in the U.S., and it’s at the center of Brookfield Asset Management’s latest $10 billion bet.

For an industry long caricatured as “trailer parks,” manufactured and modular housing is suddenly attracting some of the biggest names in real estate and private equity. Brookfield, which manages nearly $1 trillion in assets, is negotiating to acquire Yes! from Singapore’s sovereign wealth fund GIC in one of the largest housing takeovers in years. The move underscores a broader shift: factory-built housing has become too big and profitable for institutional investors to ignore.

The U.S. and Canada are both grappling with housing affordability crises. In the U.S., the average home price sits above $400,000, while mortgage rates remain stuck near two-decade highs. In Canada, where developers like Mattamy Homes are testing modular construction, housing completions continue to lag population growth.

Manufactured homes, typically priced between $70,000 and $120,000, offer a faster, cheaper alternative. “Manufactured homes—factory-built houses transported to community lots—have become a critical source of affordable housing in the U.S.,” GlobeSt reported. With conventional builders constrained by labor shortages and high material costs, modular construction offers both speed and cost efficiency.

Yes! Communities manages tens of thousands of homes across roughly 300 communities, mostly in the Midwest and Southeast. The model is simple: residents either rent homes directly or purchase them over time while leasing the underlying land. As Brookfield discovered in a prior $1.6 billion mobile-home sale, that land-lease arrangement produces reliable cash flows that Wall Street covets.

This isn’t just about cheaper homes, it’s about returns. Investors argue that modular housing provides a hedge against construction slowdowns. As one Brookfield insider told the Financial Times, capital markets are beginning to reopen, creating “fresh opportunities both for acquisitions and for refinancing existing holdings”.

The modular wave isn’t confined to the U.S.; Canadian giant Mattamy Homes has piloted prefab methods to reduce build times. At the same time, other developers explore partnerships with manufacturers to supply everything from suburban starter homes to urban infill projects. Governments, too, are taking note: municipalities from Toronto to Austin have begun experimenting with modular housing for shelters, transitional housing, and disaster relief.

What’s driving this? Beyond affordability, modular housing offers speed. Units can be constructed in weeks rather than months, weather delays vanish, and economies of scale kick in once factories run at full tilt.

Despite its advantages, modular housing still battles perception issues. To many, “manufactured home” still conjures images of 1970s trailer parks rather than energy-efficient, architect-designed units. Investors like Brookfield are betting that scale and capital can change that narrative. As one industry executive recently put it, the sector is “poised to go mainstream.”

If Brookfield’s $10 billion play closes, it will send a clear signal: modular housing is no longer a niche for budget buyers…it’s an asset class in its own right. With rising demand and limited supply, factory-built homes could be one of the few bright spots in a housing market otherwise weighed down by high interest rates and sluggish construction.