When Alisa Newman was shopping for a home earlier this year, she harbored no fantasies of a white picket fence surrounding a single-family home. Instead, she opted for a townhouse.
“I decided on a townhome because I am single and getting older, and I’m attracted by the prospect of less upkeep than with a single-family home,” she says.
Newman, who moved to Delaware, adds that her previous house in Coral Gables, FL, was a maintenance nightmare—particularly during hurricane season.
“The community where I’m buying has an HOA that will take care of lawn care and snow removal,” she says.
But it wasn’t just the low maintenance that drew Newman’s attention; it was also the price. At $620,000 for three bedrooms and 2.5 baths, it was far more affordable than single-family homes in the area.
And since it was new construction, she was able to order it to her specifications, requesting wood floors throughout rather than carpeting, a luxury primary bath, an upgraded kitchen and bathroom fixtures, and a security system. She even received $10,000 cash toward her closing costs.
Having less personal outdoor space now also doesn’t worry her because “it means less to take care of.”
Her only concern is slight: sharing walls with strangers.
“I’d like to know if the Rolling Stones or a family with 10 kids will be right next door, but my agent won’t tell me,” she says. “So if Mick and Keith are next door, I’ll just have to befriend them.”
Townhouses: The new American dream?
With the salary needed to afford a home more than doubling since the COVID-19 pandemic, the dream of owning a home has become harder for the average American.
Many experts say the lack of homes is the main problem, so developers are building residences as fast as they can. Single-family home construction jumped 16% in September.
But what if the solution was not more houses, but smaller, more compact houses instead?
Enter the townhouse.
A townhouse—defined as a home where at least two floors share a wall with another home—might lack the space and privacy of a single-family residence, but it has a lot more going for those who need a more affordable entry point to homeownership.
“At current interest rates and assuming a 10% down payment, that’s a savings of roughly $185 per month,” says Realtor.com® economist Joel Berner.
And those savings are even more significant depending on where you shop.
“There are 36 ZIP codes here where townhomes are plentiful and offer a 30%-plus discount against single-family homes,” says Berner. “They tend to be in city centers of Atlantic markets where single-family homes are expensive. In these townhome hot spots, townhomes or row homes offer the best of both worlds: proximity to desirable parts of the city and the chance to own a piece of property at a more affordable price.”
In fact, seven ZIP codes exist where townhouses are selling for over a 50% discount versus single-family homes. The biggest discount is in Raleigh, NC, where a townhome costs a median of $463,335. Meanwhile, a stand-alone single-family house will run you about $2,499,250—making townhomes here 81.46% cheaper.
Why suburbia loves townhomes
While many urban areas such as Baltimore, Philadelphia, Boston, and New York City have always been townhome fans, suburbia has caught on at this point.
Land is no longer plentiful and cheap, not even way out in rural areas. Developers have to make their investment count, and builders can fit a lot more townhomes on a single plot of land than single-family homes. Multifamily buildings are more eco-friendly, with much less required clearing of forest or farmland.
Year-to-date starts of 2- to 4-bedroom-unit projects (typically townhomes) are up 31.5% across the country year over year, while single-family starts are up only 10.1%.
“The future of townhome sales looks strong at least in terms of volume of units coming onto the market,” says Berner.
Realtor.com
The benefits of a townhouse
Some new homebuyers are already on to the new American dream.
Jacob Austin, who bought a KB Home townhome in a St. Augustine, FL, development called Orchard Park, says that he was happy to say goodbye to his single-family dwelling.
“I appreciated how low-maintenance a townhome is,” he says. “The townhome I live in is very spacious and similar to a single-family home inside, but more affordable than single-family resale homes in the area.”
Elizabeth Boese, a real estate agent in Boulder, CO, says many of her clients chose a townhouse over a single-family when they saw the “amount of house” they could get for less money.
While concerns about having your neighbors so close remain a sticking point, construction improvements to block noise can help alleviate these potential issues.
“Some of the concerns I hear are that you share a wall with your neighbors, and buyers are worried about the noise,” says KB Home sales counselor Marianna Herman. “But we use great products and noise barriers that help eliminate much of the noise that you can hear, so our homebuyers are pleased with how quiet the home can be.”
Neighbors in close proximity can even be part of the appeal of the townhome, says architect James Schaefer, who specializes in designing them.
“Townhomes combine what is attractive about single-family homes—garage, yard, multiple bedrooms—with community and proximity to neighbors,” he says.
Yet noise aside, Boese says that townhouse owners might run into other issues that a single-family home wouldn’t present.
“If the roof is shared or connected to your neighbor, then life can be difficult if the roof needs to be replaced but the neighbor will not share the cost or is unwilling to replace their portion,” she warns.
She tells of one client who was trying to sell his unit, but photos of the roof clearly showed that it was replaced only up to the line of the neighbor’s.
“You can see the difference,” she says. “It makes it harder to sell, knowing someone has such a difficult neighbor.”
She advises looking for a townhome where the roof and exterior walls are individuated, so that each owner can maintain their individual sections.
Also, most townhome developments come with homeowners association fees. Be sure to read your HOA agreement thoroughly, and know what your fees do and don’t cover.
Will the townhome overtake the single-family home?
An op-ed in the Wall Street Journal posits that people should forget about the “antiquated” idea of a large single-family home in the suburbs and instead consider the townhouse.
But will townhouses truly take over in people’s minds and hearts?
Lawrence R. Samuel, author of “Home Ownership in America,” notes that in the 1960s, condos were lauded as a way for everyone to enjoy homeownership, while in the late 1970s, it was the mobile home. More recently, one can look at the popularity of the tiny house.
None has ended the rule of the single-family house.
“I don’t foresee any other form of housing, including townhomes, usurping the supremacy of the single-family house,” he says. “It ideally aligns with the core American values of independence and private property.”
He adds: “For better or worse, the image of the suburban house, complete with a white picket fence and a backyard of one’s own, is permanently etched in our minds.”