As demand for housing continues to outpace supply, particularly in the entry-level category, pressure has increased on builders to bump up the pace of construction. But for builders, the ongoing high cost of land, materials and labor cuts into profitability, which in turn makes building larger and costlier homes more enticing.

One answer to affordability issues, particularly for first-time buyers, is a townhouse.

The good news, according to the National Association of Home Builders (NAHB), is that townhouse construction is increasing and is anticipated to grow more in the coming years. From the third quarter of 2017 to the third quarter of 2018, townhouse construction starts totaled 123,000, which is 24 percent higher than the previous four quarters.

The market share of new townhouses is now 1.8 percent of all single-family house starts, the highest share since the recession. The peak market share over the past two decades was during the first quarter of 2008, when 14.6 percent of all single-family house starts were townhouses.

The NAHB says that townhouse construction is likely to expand more because they appeal to first-time buyers and because the demand for walkable neighborhoods is growing. In addition, townhouses require less land than single-family houses.

Newly built townhouses, unlike those from earlier decades, typically have an open floor plan on the main level and a master suite with a private full bathroom. High-end townhouses sometimes have roof decks and elevators.

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