According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, during the fourth quarter of 2022, single-family attached starts totaled 37,000, which is 8% lower than the fourth quarter of 2021. Over the course of 2022, townhouse construction starts totaled 148,000 units, which is effectively unchanged from 2021.
Using a one-year moving average, the market share of newly-built townhouses increased to 15% of all single-family starts for the fourth quarter. As denser areas reopened following covid later, the townhouse market rebounded later. Additionally, as the spec single-family building market slowed in recent quarters on higher interest rates, the townhouse construction market share has increased. In fact, the current 15% market share is the highest since 1985.
Prior to the fourth quarter, 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%, on a one-year moving average basis, of total single-family construction. This high point was set after a fairly consistent increase in the share beginning in the early 1990s.
The long-run prospects for townhouse construction remain positive given growing numbers of homebuyers looking for medium-density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.