Townhomes: The Savvy Choice for First-Time Homebuyers

Buying your first home in today’s market can feel challenging. With high home prices and mortgage rates, affordability remains a major hurdle. But some buyers are making a simple trade-off to achieve homeownership faster: opting for less square footage.

The National Association of Home Builders (NAHB) reports that 35% of buyers are willing to purchase a smaller home to make their dream of homeownership a reality. One type of home that often offers a smaller footprint—and sometimes better affordability—is a townhome.

Why Townhomes Are Becoming More Popular

Townhomes generally cost less than single-family homes due to their more compact size, making them an attractive option for budget-conscious buyers. As Realtor.com explains:

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

If rising home prices have you feeling stuck, considering townhomes could be a smart way to achieve homeownership without overextending your budget.

Builders Are Meeting the Demand

Recognizing this shift in buyer preferences, builders are adjusting by offering more smaller, affordable homes. Joel Berner, Senior Economist at Realtor.com, notes:

"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."

And the data supports this trend—townhomes now represent a larger share of new construction listings than they did just a few years ago. If you're looking for an affordable path to homeownership, townhomes might be the perfect fit.

If you're considering a townhome, you now have more options than in recent years. With an increasing number of townhomes hitting the market, you may find more affordable choices—making your first home search a little easier.

Is a Townhome the Right Fit for You?

If you've been focused solely on traditional single-family homes with private yards, it might be time to explore whether a townhome could be a great alternative. A knowledgeable real estate agent can help you weigh your options—you might just discover that you love the townhome lifestyle, like many others do. As the National Association of Realtors (NAR) notes:

“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 several benefits, including lower maintenance, a built-in sense of community, and shared amenities. Plus, they provide an opportunity to start building wealth through homeownership—without the extensive upkeep that comes with a detached home. For many first-time buyers, that’s a big advantage.

However, townhomes also come with factors to consider, like shared walls and potential noise. If you're currently renting, you may already be familiar with that trade-off. This is where an agent’s guidance is invaluable—they’ll help you assess the pros and cons so you can make an informed decision that aligns with your lifestyle and long-term goals.

Bottom Line

If you're finding it challenging to buy a home within your budget, it might be time to broaden your search and explore options you haven’t previously considered—such as townhomes. While a smaller footprint may require some compromise on space, it can also be the key to achieving your goal of homeownership sooner rather than later.

At the end of the day, the homebuying process is about finding the right balance between space, location, and budget. What matters most to you? Are you willing to trade square footage for affordability? Would a townhome in a desirable neighborhood be a better fit than a larger home in a less ideal location? These are important questions to consider.

Working with a knowledgeable real estate agent can help you navigate these decisions and determine where you have flexibility. By keeping an open mind and evaluating all your options, you’ll be in a stronger position to find a home that meets both your needs and your financial goals. Connect with an agent today to take the next step toward making homeownership a reality.