According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, townhouse construction starts have slowed relative to the expansion of the overall building market.
Over the last four quarters ending with the second quarter of 2017, townhouse starts totaled 94,000, 5% lower than the four quarters prior this past year. Townhouses, or single-family attached housing, represented 25,000 starts during the second quarter of 2017, 14% lower than the total during the second quarter of 2016.
Using a one-year moving average, the market share of new townhouses stands at 11.7% of all single-family starts. The market share has declined somewhat over the last year as the rest of the single-family market has expanded.
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. 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.