On a one-year moving average, the townhouse share of single-family production in the second quarter of 2012 was slightly larger than for the same period a year ago.
At the same time, the share of homes built on the eventual owners' land, with either the owner or a builder acting as the general contractor, fell in the second quarter, even as the rest of the market recovers.
According to the National Association of Home Builders, Census Bureau data shows that builders started 19,000 single-family attached houses in the quarter, up from 18,000 for the April-May-June period in 2012.
From the third quarter of 2012 to the end of this year's second quarter, 73,000 new townhouses were started.
Using a one-year moving average, NAHB economist Robert Dietz says townhouses accounted for 12.5% of all single-family starts in the second quarter, up from 11.2%. But it's down slightly from this year's first quarter, which set a post-recession high of 12.7%.
The peak for townhouse construction was set in the first quarter of 2008, when the product accounted for a 14.6% market share.
Despite the drop off, Dietz expects townhouse production to increase in the coming quarters, with an "occasional" up and down. He thinks the share will "dip in the near term," but only because the overall single-family sector will grow.
"Nonetheless," he says in a recent blog post, "the prospects for townhouse construction are positive, given (the) large numbers of homebuyers looking for medium density residential neighborhoods such as urban villages that offer walkable environments and other amenities."
Meanwhile, the number of custom homes started in the second quarter was almost unchanged from the same period a year ago, 38,000 this year vs. 37,000 last year. But on a one-year moving average, the share has now fallen for five consecutive quarters, according to the NAHB economist.
The share is now at 21.8%, down from a high of 31.5% set in the second quarter of 2009.
Dietz says the recession "interrupted a 15-year long trend away" from custom-built houses. But as overall production slowed in 2006 and 2007, the share of not-for-sale new houses increases, even as the number of starts declined.
Lew Sichelman is an independent journalist who has been covering the housing and mortgage markets for more than 40 years.