Housing market conditions have paved the way for the best quarter for townhouse construction in 14 years, according to an analysis of Census data by the National Association of Home Builders. Medium density housing has accelerated in response to demand for affordable housing in suburban and exurban areas after a lag last year. Townhome construction starts totaled 137,000 units during the last four quarters, a 29% increase compared to the previous four quarters. The market share for new townhomes is now 12.1% of all single-family starts, says NAHB.
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.
Despite relative weakness in 2020, 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, while seeking to avoid high-density communities that depend on mass transit and elevators in the wake of the virus-related lockdowns of the spring of 2020.