You can see the progress towards next town level (= next house to spawn) in the city stats window: Click on any building within the city and select the second tab

In the upper part, you see the current Town Level (number of residential buildings) and progress towards the next one in all commodities, your town is currently accepting. When you reach the threshold by ANY of the commodities, that particular one will reset, new building will spawn within the city limits along the road (preferably at the [[City Upgrades#Constr|'''Construction site''']] you've marked, if any) and new goal will be set for all commodities. The progress of the others will remain as it were before leveling, only the new goal will be higher for next level.