Yesterday we covered a slideshow essay at Slate that criticized the current "prefab fad." Rybczynski has a 3 part indictment:

"unpopular, expensive and divorced from industrial production".

As for "unpopular", Modernist homes (prefab or otherwise) are aimed at a specific audience:

"Where are all these people who live in cool lofts and spaces in the city supposed to go when they move to the country? They certainly don't want to go live in a colonial-style house." (Robert Luntz of Resolution: 4, quoted in Builder Online)

It's unlikely that modernist prefab will sweep away the dominant preference for traditional homes. But it could easily become a profitable (self-sustaining) niche. Our favorite example is the one that we (Peter and Scott) are using to create and edit this post: the Macintosh still has less than 10% overall market share but represents a thriving business that continues to dominate several niche markets.

Prefab doesn't just mean modernist, e.g. Hive Modular offers a (mostly) traditional facade, Empyrean's Deck House and Acorn are classic "post and beam", and the "traditional" modular housing industry is growing.

The current crop of prefab architects want to make "good design" more affordable.

"Most architects working in prefab are trying to create standard designs, to reduce the cost and risk to the client, and bring the services of talented architects to smaller houses." (Lloyd Alter on Treehugger, quoted in May)

"While her first customers tended to fit the stereotype of the Prius-driving, NPR-listening eco-consumer, Kaufmann is increasingly fielding inquiries from people who just want an attractive, affordable house." (From an article on Michelle Kaufmann in July.)

Last point: prefab is not "divorced from industrial production". Many of the companies we cover have built their own factories and most others are working closely with existing factories. 

Has the prefab industry achieved its goals? No. Is it headed in the right direction? We think so.