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Townhouse construction is on the rise.

NAHB Chief Economist Robert Dietz says that over the last four quarters townhouse starts totaled 116,000, 23% higher than the prior four quarters. Townhouses accounted for 36,000 starts during the second quarter of 2018 (compared to 25,000 in the second quarter of 2017). The market share of new townhouses stands at 13.1% of all single-family starts, a post-recession high, he says.

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% of total single-family construction. This high point was set after a fairly consistent increase in the share beginning in the early 1990s.

The share for townhouse construction is expected to increase in coming years – with occasional ups and downs. The long-run prospects for townhouse construction are positive given large numbers of home buyers looking for medium density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.

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