Townhouse construction was relatively flat in the third quarter of 2019 and may be nearing the end of a recent slowdown, according to an NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design.
Given the demographics of renters entering the for-sale market, ongoing land constraints, and the growth in demand for walkable neighborhoods, the market share for townhouse construction is set for further expansion in coming years, with occasional ups and downs, said NAHB Chief Economist Robert Dietz in a recent Eye on Housing blog post.
Over the last four quarters (ending with the third quarter of 2019), townhouse construction starts totaled 111,000, 10% lower than the prior four quarters. However, townhouses, or single-family attached housing, accounted for 32,000 starts during the third quarter of 2019, only slightly lower than the 33,000 total for the third quarter of 2018, indicating some recent momentum.
Using a one-year moving average, the market share of new townhouses stands at 12.9% of all single-family starts, off recent post-recession highs. 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.