Townhouse Construction Weakens, But Its Future Looks Bright

Townhouse construction decreased during the second quarter, putting it in a weaker position than the overall building market. NAHB says most housing demand is focused on suburban and exurban areas. Compared to 2019’s second quarter, single-family attached starts dropped by 16%. Even during the last four quarters, townhouse starts were 6% lower than the prior four quarters. With the need for more single-family homes and affordable housing, townhouse construction may be poised to rise in coming years. NAHB predicts townhouse construction will become stronger for the amenities townhome communities offer.

According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, townhouse construction declined during a challenging second quarter. The sector was also relatively weaker than the overall building market. As housing demand has shifted to more suburban and exurban areas, and housing affordability headwinds persist, medium-density construction has lagged.

During the second quarter of 2020, single-family attached starts totaled 26,000, which was 16% lower than the second quarter of 2019 (31,000). Total single-family starts declined 10% when comparing the second quarter of 2020 to the second quarter of 2019. Over the last four quarters, townhouse construction starts totaled 106,000 units, 6% lower than the prior four quarter total (112,000).

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