Missing Middle Construction Continues to Fall Flat

‘Missing middle’ construction, which saw disappointing growth in 2021, continued its lackluster trend in the first quarter of 2022. The missing middle housing sector includes townhouses, duplexes and other small multifamily properties.

Despite a hint of accelerated construction in March 2022, this class of multifamily missing middle was flat to start the year. For the first quarter of 2022, there were just 4,000 2- to 4-unit housing unit construction starts. That’s even with the first quarter of 2021 and actually finds that the trailing four-quarter period was 7% lower than the year prior.

As a share of all multifamily production, 2- to 4-unit development is only 3.2% of the total. In contrast, from 2000 to 2010, such home construction made up a little less than 11% of total multifamily construction. Construction of the missing middle has clearly lagged during the post-Great Recession period.

NAHB Chief Economist Robert Dietz provides more analysis in this Eye on Housing blog post.

Learn more about missing middle construction and how it can help address the nation's ongoing housing affordability crisis.