Attached, for-sale, single-family homes, and the relative health of the market for new construction of them, are looked at fairly as a proxy for 1) first-time buyer demand, 2) entry-level housing demand, and 3) Millennial home buyer demand.
In other words, whether this view is correct or not, townhouse construction starts, completions, and absorptions add up to an important--at least psychologically--component of the new-home market. National Association of Home Builders chief economist Rob Dietz looks here at Q4 data under the Census Bureau report called Starts and Completions by Purpose and Design, for townhouses. The news is generally solid. Dietz writes:
Recent weakness in production has been associated with reduced levels of first-time homebuyers, although those trends appear to be improving.
The long-run prospects for townhouse construction are positive given large numbers of homebuyers looking for medium density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.