It can be difficult to purchase your first home in the current market. With rising mortgage rates and home prices, affordability remains a major problem. Additionally, some buyers are making a straightforward trade-off—square footage—that will enable them to move in sooner.
The National Association of Home Builders (NAHB) reports that 35% of buyers are prepared to make a smaller purchase in order to achieve homeownership. Townhomes are another location where you can typically find a smaller footprint (and occasionally better affordability).
Why Townhomes Are Gaining Popularity
Because of their smaller size, townhomes are usually less expensive than single-family homes. And for today’s frugal buyer, that is a huge plus. According to Realtor.com:
Affordability is still a top concern for buyers in the current market, which makes townhomes a desirable alternative because they are frequently less expensive than single-family homes. They are particularly attractive to first-time homebuyers on a limited budget because of this.
Moving your focus to townhomes could be one way to become a homeowner without going over your budget if you’re trying to buy but are feeling stuck because of rising prices.
Builders Are Responding to the Demand
Builders are adapting to meet the demand after observing a shift in buyer preferences toward smaller homes. As explained by Joel Berner, Senior Economist at Realtor.com:
In contrast to the current home market, builders are working hard to offer the market smaller, more reasonably priced inventory. A large part of that endeavor consists of townhomes.
And the figures support it. Townhomes now account for a larger percentage of new construction listings than they did only a few years ago, per data from Realtor.com (see graph below):
That means you have more options now than you did a few years ago if you want this kind of house. Also, having more choices that might be cheaper is always a good thing. It should help you find your first home.
Is a Townhome Right for You?
An agent can help you see if a townhome might work for you if you’ve only been interested in single-family homes with yards. You might even fall in love with the way of life. A lot of people do. This is what an article from the National Association of Realtors (NAR) says:
“Townhomes usually cost less than single-family detached homes, and they can be appealing to young professionals who want to live in average-sized neighborhoods where they can walk to many places.”
It’s because they require less upkeep, offer a sense of community with other people who live there, and have their own special features. For another thing, they let you start building wealth by owning a home without all the maintenance that comes with a detached, single-family home. That can be great for first-time buyers who are worried about upkeep anyway.
But there are some other things to think about, like how to deal with noise from shared walls. If you rent, you may already be used to that. But you should think about these kinds of things. That’s where the skill of an agent comes in. They’ll help you think about the good and bad points of a townhome so you can see how it fits into your life and long-term goals before you decide.
Conclusion:
If it’s hard for you to find a home that fits your budget, you might want to broaden your search and look at options like townhomes that you haven’t before. It’s sometimes worth giving up a little space to get your foot in the door.