The missing middle construction sector includes development of medium-density housing, including townhouses, duplexes and other small multifamily properties.

While townhouse construction has trended higher in recent quarters, the multifamily segment of the missing middle (apartments in 2 to 4 unit properties) has shown weakness. For the third quarter of 2021, there were only 2,000 starts of such residences. Over the last year, such starts totaled 12,000, down almost 8% from the prior four quarters.

As a share of all multifamily production, 2 to 4 unit development is only 1.6% of the total. In contrast, from 2000 to 2010, such home construction made up a little less than 11% of total multifamily construction. Construction of the missing middle has clearly lagged during the post-Great Recession period.

Tags: economics, home building, housing, missing middle, multifamily