Townhouses On Record Run

Townhouses, an alternative to more pricey single-family detached houses, accounted for almost 20% of all single-family starts in the third quarter.

Some 46,000 of these attached, mostly multi-story units were started in the third quarter, the National Association of Home Builders (NAHB) reports. Over the previous four quarters, townhouse starts total 179,000, a 1% increase from 177,000 in the prior four quarters.

Using a one-year moving average, the market share of newly-built townhouses stood at 18.7% of all single-family starts for the third quarter.

“With gains over the last year,” commented Robert Dietz, chief economist at the NAHB. “The four-quarter moving average market share is the highest on record, for data going back to 1985.”

Prior to the current cycle, the peak market share over the last two decades for townhouse construction was set during the first quarter of 2008, when the percentage reached 14.6%.

Dietz said the long-run prospects for townhouse construction are “positive” given growing numbers of buyers looking for medium-density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.

“Where it can be zoned, it can be built,” the economist said.