Townhouse Construction on Upswing

A photo of the exterior of a large townhome complex.

© Alexander Spatari - Moment / Getty Images

Townhouses are making a comeback in residential real estate. Buyers searching for affordability are showing more interest in townhomes, particularly first-time home buyers.

Townhouse construction climbed 28% in 2021, according to data from the National Association of Home Builders. Demand for medium-density neighborhoods is rebounding after lagging in 2020 during the beginning of the pandemic, the NAHB reports.

In the fourth quarter of 2021, single-family attached housing starts were 11.4% higher than the final quarter of 2020, according to the NAHB’s analysis of U.S. Census Bureau data.

The market share of new townhouses has risen to 13% of all single-family housing starts.

“The long-run prospects for townhouse construction remains positive, given the 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.”