Townhouse Construction Stalls—Temporarily

August 21, 2017

While the overall market for new homes is poised to expand, townhome construction is slowing down. Townhouse starts totaled 94,000 over the last four quarters, 5 percent lower than the previous four-quarter period, according to the National Association of Home Builders. Townhouses—or single-family attached housing—comprised 25,000 starts during the second quarter of this year alone, which is 14 percent lower than a year ago. 

The market share of new townhouses now stands at 11.7 percent of all single-family starts. Its peak share was 14.6 percent in the first quarter of 2008. “Despite the drop in market share during the Great Recession, the share for townhouse construction is expected to increase in coming years, with occasional ups and downs,” NAHB notes on its Eye on Housing blog. “The long-run prospects for townhouse construction are positive, given the large number of home buyers looking for medium-density residential neighborhoods such as urban villages that offer walkable environments and other amenities.” 

Source: “Townhouse Construction Flat,” National Association of Home Builders’ Eye on Housing blog (Aug. 17, 2017)