For the fourth consecutive quarter, construction of attached single-family housing (townhouses) increased both in terms of market share and year-over-year total units started.
Per first quarter 2013 Census data of Starts and Completions by Purpose and Design, total townhouse construction continued to grow at the beginning of year, reaching a starts total and market share last seen in 2009.
Townhouse construction starts totaled 15,000 for the quarter, a significant increase compared to 10,000 in the first quarter of 2012. Over the period spanning the second quarter of 2012 through the end of the first quarter of 2013, 72,000 townhouses were started.
Using a one-year moving average, the market share of townhouses now stands at 12.7% of all single-family starts, up from 10.4% for the first quarter of 2012.
The peak market share of the last two decades for townhouse construction was set during the first quarter of 2008, when it reached 14.6%. This high point was set after a fairly consistent increase in share since the early 1990s.
Despite the drop in market share during the Great Recession, I expect the share for townhouse construction to increase in coming years with occasional ups and downs. We may be approaching a dip in market share given the rise in single-family detached starts.
Nonetheless, the prospects for townhouse construction are positive given large numbers of homebuyers looking for medium density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.