The construction of multifamily missing middles experienced a decline at the beginning of 2026.
Development of medium-density housing, including townhouses, duplexes, and other small multifamily properties, is included in the missing middle construction sector.
In general, the multifamily segment of the missing middle (apartments in 2- to 4-unit properties) has disappointed since the Great Recession.
In the initial quarter of 2026, there were 4,000 construction starts for housing units ranging from two to four units.
Compared to the first quarter of 2025, this represented a substantial decline.
23,000 such beginnings were recorded over the past four quarters, a slight decrease from the previous four quarters’ figure of 24,000.
In spite of some improvements in 2025, this residential construction subsector continues to underperform in comparison to its potential, which is partially attributable to zoning restrictions.
2 to 4-unit development accounted for only 4% of the total multifamily development in the fourth quarter.
In comparison to recent historical trends, this continues to be lower.
A little less than 11% of total multifamily construction was comprised of such dwelling construction from 2000 to 2010.
Clearly, the construction of the missing middle has been delayed during the post-Great Recession period and will persist in the absence of zoning reform that prioritizes light-touch density.
[Read more about this topic on Eyeonhousing.org]