Townhouse Construction Slowed in 2023Q1

Recently released data from the US Census Bureau’s Starts and Completions by Purpose and Design for 2023Q1, with additional analysis provided by the National Association of Home Builders (NAHB), shows single-family attached starts totaled 29,000 during Q1. This number is 19% lower than 2022Q1. However, the NAHB points out that over the past four quarters, townhouse construction starts have totaled “a strong” 141,000 homes, which is only 3% lower than the previous four-quarter period.

On a one-year moving average, the NAHB reports that the market share of newly built townhouse was at 15.6% of single-family starts for 2023Q1. On the heels of a strong 2022, townhouse construction cooled at the start of the new year, continuing its trend of lagging the broader home building by a quarter or two. However, the four-quarter moving average market share is the highest since 1985.

Prior to the current cycle, the peak market share of the last two decades for townhouse construction was set during 2008Q1, when the percentage reached 14.6% on a one-year moving average basis. This high point was set after a fairly consistent increase in the share beginning in early 1990.