According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, townhouse construction starts totaled 86,000 units in 2015, an almost 18% increase over the total for 2014. Single-family attached starts totaled 21,000 for the fourth quarter of 2015, up 5% from the final quarter of 2014.

Using a one-year moving average, the market share of new townhouses stands at 11.9% of all single-family starts as of the final quarter of 2015.

The peak market share of the last two decades for townhouse construction was set during the first quarter of 2008, when the share 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.

Despite the drop in market share during the Great Recession, the share for townhouse construction is expected to increase in coming years – with occasional ups and downs. For example, recent weakness in production has been associated with reduced levels of first-time homebuyers, although those trends appear to be improving.

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.

Tags: economics, home building, housing, single-family attached, townhouses