US single-family attached starts in Q2 were 8% higher compared to Q2 2023, and up 23% over the last four quarters; the market share of newly-built townhouses stood at 17.2%: NAHB

Year-over-year gains for townhouse construction continued during the second quarter 2024 as demand for medium-density housing continues to be solid despite slowing for other sectors of the building industry.

According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, during the second quarter of 2024, single-family attached starts totaled 42,000, which is 8% higher than the second quarter of 2023. Over the last four quarters, townhouse construction starts totaled a strong 174,000 homes, which is 23% higher than the prior four-quarter period (142,000). Townhouses made up almost 15% of single-family housing starts for the second quarter of the year.

Using a one-year moving average, the market share of newly-built townhouses stood at 17.2% of all single-family starts for the second quarter. With recent gains, the four-quarter moving average market share remain at the highest on record, for data going back to 1985.

Prior to the current cycle, the peak market share of the last two decades for townhouse construction was set during the first quarter of 2008, 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 the early 1990s.

The long-run prospects for townhouse construction are positive given growing numbers of homebuyers 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.