Purchasing your first home in today's market can be challenging. With rising home prices and mortgage rates, staying within budget is difficult. Many buyers are opting for a straightforward solution to get into a home sooner: choosing smaller spaces.

The National Association of Home Builders (NAHB) reports that 35% of buyers are open to downsizing in order to achieve homeownership. One option for a smaller living space, often with more affordability, is townhomes.

Why Townhomes Are Gaining Popularity

Townhomes usually come at a lower price point compared to single-family homes because they have a smaller footprint. This is a significant advantage for buyers who are keeping an eye on their budget.

““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 . . .”
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— Realtor.com

If you're looking to buy but feeling overwhelmed by rising prices, consider turning your attention to townhomes. They can be a more affordable option to help you enter the housing market without stretching your budget too thin.

Builders Are Responding to the Demand

Builders have noticed that buyers are leaning towards smaller homes, so they're making changes to their offerings. Joel Berner, Senior Economist at Realtor.com, explains this trend:

““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.”
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— Joel Berner, Senior Economist at Realtor.com

The numbers tell the story. Data from Realtor.com shows that townhomes are becoming a larger portion of new construction listings compared to just a couple of years ago.

If you're looking for this kind of house, you now have more options compared to the past few years. Having more potentially affordable choices is definitely a positive change. This should simplify your search for your first home.

Is a Townhome Right for You?

If you’ve been looking primarily at traditional homes with yards, consider talking to an agent about townhomes. You might discover that the townhome lifestyle suits you well. Many people enjoy it. According to an article from the National Association of Realtors (NAR):

““Townhomes tend to cost less than single-family detached homes and can be appealing to young professionals who may desire medium-density, walkable neighborhoods.”
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— National Association of Realtors (NAR)

They require less upkeep, foster a sense of community among residents, and come with unique amenities. Plus, they offer a way to start building wealth through homeownership without the burdens of maintaining a detached single-family home. This can be especially appealing for first-time buyers who might be anxious about maintenance responsibilities.

Townhomes do have some other factors to keep in mind, like potential noise from shared walls. If you're renting right now, you might already be familiar with that. These are the kinds of things to consider. That’s where a real estate agent can help. They'll guide you in weighing the pros and cons, ensuring you grasp how a townhome aligns with your lifestyle and long-term goals before you make a final decision.

Bottom Line

If you’re having a tough time finding a home that fits your budget, it might be worth considering a broader range of options, like townhomes. Sometimes, being a bit flexible on space can really help you secure a place while still getting started on your homeownership journey.

What’s your top priority — is it the amount of space, the neighborhood, or sticking to your budget? Let’s work together to see how we can adjust your expectations to make homeownership a reality.