Townhouse construction looks to rebound
Land constraints and the desire for walkable neighborhoods are expected to push demand for more townhouses.
Townhouse construction could be closing in on and an end to a recent slowdown, according to the National Association of Home Builders (NAHB).
According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, townhomes showed relatively flat construction conditions for the third quarter.
But the NAHB said townhouse construction is ready for expansion given the demographics of renters entering the for-sale market along with ongoing land constraints and the growth of demand for walkable neighborhoods.
For the past four quarters, townhouse construction starts totaled 111,000, 10% lower than the prior four quarters. However, townhouses, or single-family attached housing, accounted for 32,000 starts during the third quarter of 2019. This was only slightly lower than the 33,000 total for the third quarter of 2018, indicating some recent momentum.
Using a one-year moving average, the NAHB said that the market share of new townhouses stands at 12.9% of all single-family starts, off recent post-recession highs.
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, the NAHB said.
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