Townhouse Starts and Market Share Grow During Third Quarter

For the third consecutive quarter, construction of attached single-family housing (townhouses) increased both in terms of total units and market share.

Per third quarter 2012 Census data of Starts and Completions by Purpose and Design, total townhouse construction has increased significantly in 2012, reaching a starts total and market share last seen in 2008.

Quarterly construction of townhouses rose from 12,000 starts in the third quarter of 2011 to 21,000 starts during the same period of 2012. Using a one-year moving average, the market share of townhouses now stands at 12.1% of all single-family starts, up from 11.2% for the second quarter of 2012.

The peak market share of the last two decades for townhouse construction was set during the first quarter of 2008, when it reached 14.6%. This peak was set after a fairly consistent increase in share since the early 1990s.

Despite the drop in market share during the Great Recession, I expect the share for townhouse construction to increase in coming years. The prospects for the townhouses are positive given large numbers of homebuyers looking for medium density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.