Townhomes: A Smart Solution for Today’s First-Time Buyers

Townhomes: A Smart Solution for Today’s First-Time Buyers

Purchasing your first home in today’s market can be challenging due to high prices and mortgage rates. To overcome affordability concerns, some buyers are opting for smaller homes.

The National Association of Home Builders (NAHB) reports that 35% of buyers are open to purchasing a smaller home to achieve homeownership. One option that often offers a smaller footprint and better affordability is a townhome.

Why Townhomes Are Becoming More Popular

Townhomes generally have lower prices than single-family homes because of their compact size, making them an appealing choice for budget-conscious buyers. As Realtor.com explains:

"In today's market, affordability remains a key priority for homebuyers, making townhomes an attractive option because they are often priced more reasonably than single-family homes. It makes them especially appealing to first-time homebuyers on a tighter budget . . ."

If rising prices have made homebuying feel out of reach, considering townhomes could be a way to achieve homeownership while staying within budget.

Builders Are Adapting to Demand

Recognizing buyers' growing interest in smaller homes, builders are adjusting their strategies to meet this demand. As Joel Berner, Senior Economist at Realtor.com, explains:

"Builders are making a concerted effort to provide smaller, more affordable inventory to the market in a way that the existing-home market cannot. Townhomes are a significant portion of that effort."

The data supports this trend. Realtor.com reports that townhomes now represent a larger portion of new construction listings compared to just a few years ago (see graph below):

That means if you're considering this type of home, you now have more options than in recent years. Having more choices—especially ones that may be more affordable—can make your home search easier.

Is a Townhome Right for You?

If you've only been looking at traditional homes with private yards, an agent can help you determine if a townhome suits your needs. You might discover that you love the lifestyle—many people do. As the National Association of Realtors (NAR) highlights:

“Townhomes tend to cost less than single-family detached homes and can be appealing to young professionals who may desire medium-density, walkable neighborhoods.”

Townhomes offer lower maintenance, a built-in sense of community, and unique amenities. They also allow you to start building equity without the upkeep of a detached home—an advantage for first-time buyers concerned about maintenance.

However, shared walls may mean dealing with some noise. If you're currently renting, this might not be a big adjustment. These are factors to consider, and an agent can help you weigh the pros and cons to ensure a townhome aligns with your lifestyle and long-term goals.

Bottom Line

If affordability is a challenge, widening your search to include townhomes could be a smart move. Sometimes, compromising on space is the key to getting into homeownership.

What matters most to you—space, location, or budget? Let’s figure out the best path forward.