Despite a recent lull in growth, townhouse construction proves to be a crucial part of the entry-level housing market. In fact, a recent report by the National Association of Homebuyers predicts construction of this type of home will increase in the coming quarters.
At the start of 2017, townhouse construction saw a 4 percent total increase over the previous year, totaling 98,000 townhouse starts. Until recent quarters, townhouse growth topped all other types of single-family starts. However, overall construction rates have decreased in the first quarter of 2017.
Current slowing of growth is partially due to labor shortages, an aspect that doesn’t pair well with the demand for more homes in the entry-level housing market. But what this really means is that townhouses will likely experience notable long-term growth. According to data from NAHB, the current townhouse market share rate of 12.4 percent nears the 2008 record-high of 14.6 percent.
Townhouses stand out from other forms of housing, as they’ve proven to be a convenient choice for the current generation of new buyers: millennials. Many young people remain wary of increasing starter-home prices paired with an overall decrease in inventory. Overall affordability makes townhouses a more reasonable choice for first-time buyers. These communities also provide unique amenities for millennials, a group largely attracted to urban areas — some of these include easy access to transportation and walkability.