US Townhouse Construction Records Best Quarter Since 2007 in Q3

US Census Bureau data on Starts and Completions by Purpose and Design, with additional analysis provided by the National Association of Home Builders (NAHB), reveal that single-family attached starts totaled 43,000 units in Q3, 16% higher than 2022Q3. This increase over the last four quarters, during which townhouse construction totaled a stout 148,000 homes, is only 2% lower than the prior four-quarter period when 151,000 townhouses were being constructed.

On a one year moving average, the market share of newly built townhouses stood at 16.5% of all single-family starts in Q3. With the recent gains, the four-quarter moving average market share is the highest since 1985.

According to the NAHB, 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. This high point was set after a fairly consistent increase in the share beginning in the early 1990s.

The NAHB concludes that 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.