Townhouse Construction Slows

AUTHOR

Robert Dietz

DATE

August 17, 2022

CATEGORIES
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According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, during the second quarter of 2022 single-family attached starts totaled 38,000, which is 9.5% lower than the second quarter of 2021. Nonetheless, over the last four quarters, townhouse construction starts totaled 148,000 units, 7% higher than the prior four quarter total (138,000). However, these totals will slow in the quarters ahead as the overall building market slows.

Using a one-year moving average, the market share of newly-built townhouses decreased to 12.5% of all single-family starts. This represents a slight weakening of market share after recent gains for medium-density housing demand.

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%, on a one-year moving average basis, of total single-family construction. This high point was set after a fairly consistent increase in the share beginning in the early 1990s.

The long-run prospects for townhouse construction remain positive given growing numbers of homebuyers looking for medium-density residential neighborhoods, such as urban villages that offer walkable environments and other amenities. This will be particularly true for prospective first-time buyers in high cost metro areas.



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