The construction industry faces a significant challenge in addressing both the housing crisis and climate change. To mitigate this challenge, there has been a push toward the incorporation of industrialization in the construction process to improve product quality, reduce execution times, and lower production costs. However, it is also crucial to implement materials with sustainable characteristics to decrease the environmental impact of housing. In light of this, the present study analyzes the environmental and economic impacts through the development(design) of a modular construction system using materials with low environmental impact. Specifically, the structural components of the system are constructed using plywood boards, thermal insulation is provided by wheat straw, and the interior finish is made of clay plaster. The Skylark 250 model served as the chassis for the structure, with the wheat straw being applied through a blowing process and the clay plaster applied manually. Thermal transmittance, energy demand, environmental impact, and economic analysis were all evaluated for this solution. The study results yielded a modular housing solution with an energy demand of 55 (kWh/m²/year), which, when paired with photovoltaic panels, meets the Net Zero challenge. In terms of construction time, the proposed system requires 44% less time than traditional construction methods and is 29% less expensive economically, making it an attractive option for the housing market.