The housing industry has problems with soaring foreclosures, big inventories and homes that take forever to sell. But there's a related sector that has it worse: The manufactured-housing industry is suffering its lowest sales in at least 40 years.

Loans are hard to get. Would-be buyers can't sell their existing homes, manufactured or otherwise. Dealerships and manufacturers have closed nationwide. Parks have been closing in some areas at an accelerated rate because the land is more valuable for other uses.

The number of manufactured and mobile homes built peaked in 1973 at 579,960, then fell. The number built peaked again at 348,671 in 1999 and has dropped every year since. About 117,000 homes were made last year. And the number of U.S. manufacturing plants has dropped by 118, or 37 percent, since 1999.

But the industry is not dead, if for no other reason that new manufactured homes can be bought at about one-quarter the cost of a new "site-built" home.

And despite the challenges, many manufactured-home builders believe it will recover when the rest of the housing market does.

"We have seen some interesting trends," said Kathy Munson, director of investor relations for Fleetwood Homes in Riverside, Calif., the nation's second-largest manufactured-home builder. "Some states are starting to recover, but Arizona, California and Florida are not doing as well. We believe that's because they are retirement states."

She believes retirees who would like to buy a manufactured home can't sell their existing homes. "We don't think we are losing those sales," she said. "But we do think it's causing a delay."

Lori Soland, one of four owners of the Family Home Center, a manufactured-housing dealer in Buckeye, Ariz., said she is surprised the industry is doing badly because she said sales are "not horrible."

Since opening in July, the business has been selling two or three homes a month, generally for cash. A buyer from Southern California put down $30,000 on a home, she said.

The manufactured-housing industry's problems began in the late 1990s, when it went through problems the rest of the housing industry is now experiencing. Manufactured-housing lenders started getting too competitive and lowered their lending standards, said Bruce Savage, vice president of public affairs for the Manufactured Housing Institute in Arlington, Va.

Not only is it harder to get a loan for a manufactured home, but would-be buyers are having trouble selling their existing site-built and manufactured homes.

The manufactured housing industry doesn't have the nationwide Multiple Listing Service that the rest of the housing industry does. Many Realtors won't handle them because the prices and commissions are low.

Steve Pappas, of Phoenix-based Apollo Properties Inc., used to be the state's main watcher of the industry. While he remains a consultant, he no longer tracks it as closely because there are too few permits being issued for new homes.

"There have been no new (manufactured housing) communities built in metro Phoenix in the last seven or eight years," he said. "I don't know what direction the industry is going to take and where it's going."