Townhomes are Fastest-Growing in Single-Family New Construction Market
April 18, 2017 | Elite Realty
Townhomes are currently the most rapidly growing division of the single-family housing market, according to the National Association of Home Builders (NAHB).
New construction of townhomes increased 17.8 percent from 2014 to 2015. That compares to a 10 percent construction increase for detached single-family homes and a 12.1 percent increase in co-op, condominium and apartment construction over the same period of time. In 2016, townhomes made up approximately 12.4 percent of all new construction in the single-family home market, according to the United States Census Bureau data.
First-time homebuyers are attracted to rows of single-family homes, and approximately one quarter of current homeowners or potential homebuyers say they plan to buy a townhome during 2017, according to a survey conducted by realtor.com. This data indicates townhomes are the second most popular type of home after detached single-family homes.
Townhomes and row homes tend to sell for a substantially lower price than detached single-family homes. According to realtor.com®, the median price for townhomes was $198,000 in September, which is about 12 percent less than detached single-family homes.
“Townhouses are indeed the affordable solution to expensive land in more and more urban areas,” says Jonathan Smoke, Chief Economist for realtor.com®. “For many people, it can be the most affordable way to buy a home and to get into a more desirable neighborhood.”
Young families and first-time homebuyers see townhomes as a sort of “bridge” between an apartment home and a detached single-family home.
Many townhome communities also tend to be more up to date, with decent schools, shopping and employment areas nearby, according to Smoke. Robert Dietz, NAHB’s Chief Economist, says builders tend to favor townhome communities, because they can build more units on smaller lots, which is significant in metro areas and older suburbs, where available land is scarce and high-priced. “You tend to have really nice townhouse developments build in areas that are running out of land,” says Smoke. “They should be gaining in popularity as [more] people realize they’re more affordable alternatives to renting.”