Townhouse construction has seen an upswing through the first half of 2018, according to a new study from the National Association of Home Builders.
A total of 105,000 townhouse starts were accounted for, bringing a 7 percent increase into the first quarter of the year. Although starts were up during the previous four quarters total, townhouses accounted for just 21,000 starts during quarter one of 2018 compared to the 22,000 starts accounted for during the same quarter last year.
Despite the spike in townhouse construction, few affordable homes are left in the market. Inventory of starter homes, priced $200,000 and under, has decreased over the last two years. These homes are the ones that face the lowest inventory across the country. Thankfully for entry-level buyers, home shortage can be changed, according to chief economist for realtor.com, Danielle Hale.
For this reason, builders are starting to focus their attention on starter homes. Buyers are looking for medium density residential neighborhoods, hence the increase in townhouse construction. The strong economy will likely complement the increase in townhouse construction throughout the year.
“Overall fundamentals remain solid, driven by a growing economy and steady job creation, which will sustain home sales in 2018 slightly above last year’s pace,” Yun said. “The worsening housing shortage means home prices are primed to rise further this year too, hindering affordability conditions for homebuyers in markets across the country.”