Townhouse Starts Indicate Sturdy Market

February 22, 2018

Townhouse construction continues to post gains. Over 2017, townhome starts totaled 104,000, a 7 percent increase over 2016, according to an analysis of U.S. Census Bureau data by the National Association of Home Builders.

Further, townhouses or single-family attached housing numbered 29,000 of the starts during the fourth quarter of 2017, which is 21 percent higher than a year ago.

The market share of new townhouses accounts for 12.4 percent of all single-family housing starts. For comparison, over the past two decades, townhouse construction peaked in the first quarter of 2008 at 14.6 percent of total single-family construction.

“After a soft patch, the market share is rising again,” Robert Dietz, chief economist of the NAHB, notes on its Eye on Housing blog. “I expect future gains as townhouses are a useful bridge from rentership from homeownership for younger prospective home buyers in high-cost markets, among other market opportunities. … The long-run prospects for townhouse construction are positive given large numbers of home buyers looking for medium density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.”

Source: “Townhouse Construction Expands,” National Association of Home Builders’ Eye on Housing blog (Feb. 20, 2018)