The number of new homes being built is down a staggering 70 percent from a peak in 2006 but one part of the hard hit construction industry is showing signs of growth despite the difficult economic climate.

Once regarded as cheap and flimsy, modular homes are gaining popularity and are now just as likely to be luxury residences.

“This is the way of the future,” said John Ela, owner of Epoch Homes in Pembroke, New Hampshire. The company offers a variety of building options from cozy beach cottages to modular mansions to fit a variety of budgets.

Built in a warehouse, the homes are constructed in segments on an assembly line, fully insulated and wired before they’re shipped to their final destination.

“It’s a faster way. It’s a less expensive way and it’s a lower risk way and it’s also much higher quality because of the all the control systems we have in place in the controlled factory environment,” said Ela.

Once on site, the homes are set in place and assembled with startling speed, a crane lowering the pieces into place within hours.

Homeowner Doug Gorman chose modular construction for his new, twenty-six hundred square foot home on Cape Cod, aiming to save time and money.

“It gets built quicker and you save thirty to fifty percent of what a stick built house costs,” said Gorman.

Stick built is the traditional, on-site way of constructing a home and builders of the $725,000 house next door say one downside to modular is that all the decisions have to be made up front.

“Here’s where I think we’ve got the real advantage, you know, assembling stick by stick on site, dealing with every field condition – I think we can deliver a much higher quality product,” said Matthew Cole, President of Cape Associates. The company is one of the largest builders on Cape Cod.

Only 3 percent of American homes are modular so competition with traditional stick builts is still minimal but the modular industry is building a new image, one experts say is appealing to homeowners who are looking for options in the midst of a tough economy.