Northern town initially housing a single music group (5)
I believe the answer is:
nonet
'music group' is the definition.
(I've seen this before)
'northern town initially housing a single' is the wordplay.
'initially' says to take the initial letters.
'housing' is an insertion indicator.
'a single' becomes 'one' ('one' can be a synonym of 'single').
The initial letters of 'northern town' is 'nt'.
'nt' going around 'one' is 'NONET'.
(Other definitions for nonet that I've seen before include "Composition for nine voices" , "Tenon (anag.)" , "Musical work for a set number of performers" , "Musical composition -- tonne (anag)" , "Music for nine instruments or voices" .)