Townhouse Construction Growth Continues

According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, townhouse construction starts continued to grow on a year-over-year basis.

Over the course of 2016, townhouse starts totaled 97,000, a more than 12% gain over the prior year total. The townhouse market recorded a faster growth rate than the overall single-family market for 2016. For the fourth quarter of 2016, townhouse starts came in at 24,000.

Using a one-year moving average, the market share of new townhouses stands at 12.4% of all single-family starts for the final quarter of 2016, near the cycle high.

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% of total single-family construction. This high point was set after a fairly consistent increase in growth beginning in the early 1990s.

Despite the drop in market share during the Great Recession, townhouse construction is expected to increase in coming years – with occasional ups and downs.

The long-run 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.

 



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