According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, townhouse construction experienced was flat on a year-over-year basis during the first quarter of 2020.
Over the past four quarters, single-family attached housing experienced a small decline, which matches data in the NAHB HBGI. Those estimates reveal reduced construction activity for large metro suburban markets during 2019. Nonetheless, townhouse construction should experience gains during the second half of 2020, as renters and prospective homebuyers seek out locations outside of high density urban core neighborhoods due to concerns related to the coronavirus crisis.
During the first quarter of 2020, single-family attached starts totaled 22,000, which was equal to the total for the first quarter of 2019. Over the last four quarters, townhouse construction starts totaled 110,000 units, 7% lower than the prior four quarter total (118,000).
Using a one-year moving average, the market share of new townhouses fell to 12% of all single-family starts, off recent post-recession highs.
The peak market share of the last two decades for townhouse construction was set during the first quarter of 2008, when the percentage reached 14.6% of total single-family construction. This high point was set after a fairly consistent increase in the share beginning in the early 1990s.
The market share for 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, and seeking to avoid high-density environments that depend on mass transit in the wake of the virus-related lockdowns of the spring of 2020.