The missing middle construction sector includes development of medium-density housing, such as townhouses, duplexes and other small multifamily properties.
The multifamily segment of the missing middle (apartments in 2- to 4-unit properties) has generally disappointed since the Great Recession. However, there has been a noticeable uptick for this type of housing construction in recent data. For the first quarter of 2025, there were 5,000 2- to 4-unit housing unit construction starts. This is flat relative to the first quarter of 2024.
However, over the last four quarters this type of construction totaled 23,000 units, up 53% over the four quarters prior to that period.
As a share of all multifamily production, 2- to 4-unit development was just above 6% of total multifamily development for the first quarter. However this is still lower than recent historic trends. From 2000 to 2010, such home construction made up a little less than 11% of total multifamily construction.
Construction of the missing middle has clearly lagged during the post-Great Recession period and will continue to do so without zoning reform focused on light-touch density. But recent data offer hope for additional housing supply for these kind of homes.
