Tuesday, 18 Dec 2018
Business

Townhouse construction is on the rise, offering more options for first-time homebuyers

While demand for housing continues to outstrip supply, especially in the entry category, builders have more and more pressure to speed up the pace of construction. But for builders, the current high cost of land, materials and labor reduces profitability, making it more attractive to build larger and more expensive homes.

A townhouse is a solution to affordability problems, especially for first time buyers.

The good news, according to the National Association of Home Builders (NAHB), is that townhouse construction is increasing and is expected to grow further in the coming years. Between the third quarter of 2017 and the third quarter of 2018, the construction of townhouses began for a total of 123,000, 24% more than the previous four quarters.

The market share of new townhomes now accounts for 1.8% of total single-family home starts, the highest share since the recession. Over the past two decades, market share reached its peak in the first quarter of 2008, when 14.6% of all single-family housing starts were row houses.

According to the NAHB, townhouse construction is likely to grow further as it attracts first-time homebuyers and increases the demand for pedestrian neighborhoods. In addition, townhouses require less land than single-family homes.

Recently built townhouses, unlike those of previous decades, generally have an open floor plan on the main level and a master suite with a full private bath. Upscale townhouses sometimes have terraces and elevators.

For the full report, click here.

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