Townhouse Construction Is Increasing

A picture of a row of townhomes in daytime.

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Builders are ramping up construction of townhomes. Single-family attached starts in the first quarter were 16% higher than a year earlier, according to a recent analysis of U.S. Census Bureau data by the National Association of Home Builders. Over the last four quarters, townhouse construction has moved 25% higher than the prior total of the previous four quarters.

The latest increase in townhouse starts marks a rebound from recent declines that occurred in the early years of the pandemic in medium-density housing, the NAHB notes.

“The long-run prospects for townhouse construction remain positive given growing numbers of home buyers looking for medium-density residential neighborhoods, such as urban villages that offer walkable environments and other amenities,” Robert Dietz, the NAHB’s chief economist, writes for the association’s Eye on Housing blog. “This will be particularly true for prospective first-time buyers in high-cost metro areas.”

In the first quarter, the market share of new townhouses rose to 13.4% of all single-family starts. For comparison, the peak market share over the last two decades in townhouse construction was 14.6%, which was set in the first quarter of 2008.