Townhouse Construction Hits Record Market Share

Townhouse construction expanded more than 9% on a year-over-year basis per data from the second quarter of 2025.

According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, during the second quarter of 2025, single-family attached starts totaled 45,000. Over the last four quarters, townhouse construction starts totaled a strong 179,000 homes, which is 3% higher than the prior four-quarter period (173,000). Townhouses made up 17% of single-family housing starts for the second quarter of the year.

Using a one-year moving average, the market share of newly-built townhouses stood at 18.3% of all single-family starts for the second quarter. With gains over the last year, the four-quarter moving average market share is the highest on record for data going back to 1985.

Prior to the current cycle, the peak market share had reached 14.6% on a one-year moving average basis during the first quarter of 2008.

Medium-density housing, such as townhouses, duplexes and other small multifamily properties, are often referred to as “missing middle” housing types. Missing middle housing can assist in both increasing the number of units built and providing units for a wide variety of price points.

However, the multifamily segment of the missing middle (apartments in 2- to 4-unit properties) has generally disappointed since the Great Recession. For the second quarter of 2025, there were 5,000 2- to 4-unit housing unit construction starts. This represents a small increase relative to the second quarter of 2024.

As a share of all multifamily production, 2- to 4-unit development was just 4% of total multifamily development for the second quarter. As recently as 2000 to 2010, such home construction made up a little less than 11% of total multifamily construction.

NAHB Chief Economist Dr. Robert Dietz shares more insights on townhouse construction and multifamily missing middle trends at Eye on Housing.