Townhouse Construction is Expected to Increase

Townhouse construction is outperforming other building sectors, 

a new analysis from the National Association of Home Builders shows. Townhouse construction posted continued to outperform other building sectors during the third quarter of 2018. 


Townhouse construction is set for further expansion given the demographics of renters entering the for-sale market, as well as ongoing land constraints and the growth of demand for walkable neighborhoods.

Over the last four quarters (ending with the third quarter of 2018), townhouse starts totaled 123,000, 24% higher than the prior four quarters.

Townhouses, or single-family attached housing, accounted for 33,000 starts during the third quarter of 2018 (compared to 27,000 in the second quarter of 2017). Using a one-year moving average, the market share of new townhouses stands at 13.8% of all single-family starts.

The peak market share of the last two decades for townhouse construction was set during the first quarter of 2008, when the percentage reached 14.6% of total single-family construction. This high point was set after a fairly consistent increase in the share beginning in the early 1990s.

Builders expect demand to grow. “Townhouse construction is set for further expansion given the demographics of renters entering the for-sale market, as well as ongoing land constraints and the growth of demand for walkable neighborhoods,” the NAHB notes in its Eye on Housing blog. The market share of new townhouses is now at 13.8 percent of all single-family starts.

Townhouses were popular a decade ago, The long-run prospects for townhouse construction are positive given large numbers of homebuyers looking for medium density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.

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Source: “Townhouse Construction Continues Strong Performance,” National Association of Home Builders’ Eye on Housing blog (Nov. 21, 2018)