Townhouse Share of Home Starts Stays at Record High

Townhouse construction remained elevated in the second quarter 2024 as demand for medium-density housing continues to be solid despite slowing for other sectors of the housing industry.

According to analysis by NAHB of U.S. Census data, 42,000 townhouses were started last quarter, an 8% increase over Q2 2023. Over the past four quarters, 174,000 townhomes were started, up 23% from the previous four quarters.

Townhouses made up almost 15% of single-family home starts in Q2 2024. But using a one-year moving average, the share of townhouses jumps to 17.2% in Q2 2024 for the second-straight quarter, an all-time high in the data series dating back to 1985.

Prior to the current cycle, the peak market share of townhouse construction was set during the first quarter of 2008, when the share reached 14.6% on a one-year moving average basis. Townhome construction had enjoyed steady growth in both real terms and in share from the early 1990s up until the housing crash of 2008.

“This is a form of housing construction that will continue to gain strength, as more first-time home buyers enter the market and as generational preferences shift to more walkable, medium-density locations,” wrote NAHB Chief Economist Dr. Robert Dietz more than a decade ago in a guest piece for U.S. News & World Report.

See more from Dr. Dietz in this Eye on Housing post.