With the enormous population growth in the last few decades, there is a demand for infrastructure development and rapid urbanization that result in the depletion of natural resources, emission of greenhouse gases, and subsequently, exacerbation of the climate crisis. Moreover, waste materials generated by different industries such as the construction industry end up by burning or dumping them in landfills further posing serious health hazards. Besides, skyrocketing prices of housing and limited income of major population groups have resulted in the housing crisis. Therefore, it is imperative to find low-cost, environment friendly and sustainable solutions to mitigate aforementioned problems. The literature indicates that the modular construction method could be a viable solution that can reduce waste generation and construction costs. This method has been extensively used in many parts of the world in different applications mostly in the construction of low-rise buildings. However, with the advent of technological advancement in the construction industry, studies have shown that modular construction can also be successfully employed for medium and high-rise buildings. This paper presents a holistic review of the existing literature on the development of modular wall panels to foster sustainability and alleviate the housing gap. To this end, a proactive approach has been undertaken to identify key research areas to study the use of waste materials in the development of modular wall panels. The results of the literature review revealed that modular wall panels have the potential to substantially reduce the construction cost and carbon footprint. The barriers to the growth of modular construction were also discussed in this paper.