Townhouse Construction in U.S. Increases Quarter-Over-Quarter and Year-Over-Year in 2021

According to the U.S. Census Bureau’s data for Starts and Completions by Purpose and Design, with further analysis provided by the National Association of Home Builders (NAHB), townhouse construction increased by 28.1% in 2021. In 2020, medium-density construction lagged as housing demand shifted to more suburban and exurban areas. However, as the economy recovered during the past year, demand for medium-density neighborhoods returned.

During Q4 2021, single-family attached starts totaled 39,000, which is 11.4% higher than Q4 of 2020. The Q4 2021 quarterly market share of 14.7% was the highest since the start of 2008.

Over the last four quarters, townhouse construction starts totaled 146,000 units, 28% higher than the prior four quarter total (114,000). Using a one-year moving average, the market share of new townhouses increased to 13% of all single-family starts. This represents a rebound after recent declines.

The NAHB analysis concludes that 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. This will be particularly true for prospective first-time buyers in high-cost metro areas.