Why More First-Time Buyers Are Choosing Condos and Townhomes

3 days ago

6 min read

Home prices have pushed many buyers to ask a hard question: is there anything affordable left to buy?

For first-time buyers, that question can feel even heavier. Saving for a down payment, qualifying for a mortgage, and competing with other buyers is already a lot. When the search starts with only single-family detached homes, the options can look limited fast.

But homeownership may be more within reach than it first appears. Sometimes the key is widening the search to include homes that buyers often overlook, especially condos and townhomes.

These properties are not second-best choices. For many people, they are a practical first step into ownership. Right now, two factors make them especially worth a closer look: there are more of them available, and they can often come with a lower price point than detached single-family homes.

There are more condos and townhomes on the market

A lot of buyers begin their search with a mental picture of a home: a detached house, a yard, a driveway, and no shared walls. That image is common, but it can also narrow the search before it really begins.

Condos and townhomes open up a different part of the market. And right now, that part of the market has more inventory than it has had in years.

According to HousingWire Data, there were 233,030 condos and townhomes for sale this June, more than any June in at least the past decade and more than double the number available in 2022.

That matters because inventory changes the buying experience.

When there are more homes to choose from, buyers may have:

More neighborhoods to consider
More time to compare options
Less pressure to rush into an offer
More room to negotiate on price, repairs, or closing costs
A better chance of finding a home that fits both needs and budget

This does not mean every local market is flooded with condos and townhomes. Real estate is local, and availability can vary a lot by city, price range, and neighborhood. A downtown area may have many condo options, while a suburban area may have more townhome communities.

Still, the national trend is meaningful. More supply in this segment gives first-time buyers another path at a time when many feel boxed out.

A wider search can change what feels possible

Searching only for detached homes can make the market feel smaller and more expensive than it really is. That is especially true in areas where land is limited or where single-family homes are in high demand.

Adding condos and townhomes to the search can change the numbers.

A condo is usually an individually owned unit within a larger building or community. A townhome is usually a multi-level home that shares one or more walls with neighboring homes. Both can offer ownership without requiring the same budget or upkeep that often comes with a detached house.

For a first-time buyer, that can make a real difference. A smaller purchase price can mean a lower down payment requirement, depending on the loan program. It can also mean a more manageable monthly payment, though buyers still need to account for homeowners association fees, insurance, taxes, and other costs.

This is one reason more first-time buyers are choosing condos and townhomes. They can provide a way to stop renting, start building equity, and get familiar with homeownership without taking on more house than the budget can support.

The key is to compare the full monthly cost, not just the listing price.

That includes:

Mortgage principal and interest
Property taxes
Homeowners insurance
HOA dues
Utilities
Maintenance costs
Parking fees, if any
Special assessments, if the community has them

A condo with a lower price but high monthly HOA dues may or may not be a better fit than a townhome with a slightly higher price and lower fees. The only way to know is to run the numbers side by side.

Condos and townhomes can reduce some ownership stress

Price is not the only reason buyers look at condos and townhomes. Maintenance matters too.

A detached house often comes with full responsibility for exterior upkeep. That can include the roof, siding, yard, driveway, gutters, fencing, and landscaping. For some buyers, that is part of the appeal. For others, it adds cost, time, and stress.

Condos and townhomes can shift some of those responsibilities, depending on the community rules. Many condo associations handle exterior maintenance, shared spaces, landscaping, and amenities. Some townhome communities also include lawn care or exterior repairs.

That can be helpful for buyers who:

Do not want to spend weekends on yardwork
Travel often
Have limited time for maintenance
Prefer predictable shared maintenance costs
Want amenities like a pool, fitness room, or walking paths

There is a tradeoff. HOA dues are part of the monthly cost, and community rules can affect what owners can change or do with the property. Some associations have rules about pets, rentals, exterior decor, parking, or renovations.

That does not make these homes a bad choice. It just means buyers need to read the HOA documents carefully before committing. A good fit is not only about the home itself. It is also about the community rules and the long-term cost of living there.

They can be a smart first step, not a permanent compromise

Some buyers hesitate to consider a condo or townhome because they see it as giving something up. They picture it as less private, less spacious, or less flexible than a detached house.

Sometimes that is true. Shared walls, smaller outdoor areas, and HOA rules are real considerations. But for many first-time buyers, the goal is not to buy the forever home right away. The goal is to buy a home that works for this stage of life and helps build financial stability over time.

A condo or townhome can offer:

A lower entry point into the market
A chance to build equity
A shorter commute in some areas
Access to neighborhoods where detached homes cost much more
Less exterior maintenance
A more manageable first ownership experience

That can be especially valuable in high-cost markets, where waiting for the perfect detached home may mean staying on the sidelines for years.

Buying smaller or differently does not mean buying poorly. It means matching the purchase to the budget, lifestyle, and long-term plan.

For example, a first-time buyer may not need a large yard right now. A townhome near work, transit, or family could offer more day-to-day value than a detached home farther away. Another buyer may prefer a condo in a walkable area with lower upkeep over a house that stretches the budget thin.

The best home is not always the biggest one. It is the one that supports the life being built.

What to look at before making an offer

Condos and townhomes can be excellent options, but they require a slightly different review process than detached homes.

Before making an offer, buyers should look beyond the unit itself and study the community. That includes the financial health of the HOA, the condition of shared areas, and any rules that could affect daily life.

A few smart questions to ask include:

How much are the HOA dues, and what do they cover?

Some fees include water, trash, landscaping, exterior insurance, or amenities. Others cover much less.

Are there any upcoming special assessments?

A special assessment is an extra charge owners may need to pay for major repairs or projects.

What are the community rules?

Review rules on pets, parking, rentals, noise, renovations, and exterior changes.

How well maintained is the property?

Look at roofs, walkways, shared walls, lighting, landscaping, and common areas.

Does the loan program allow this property type?

Some loan types have rules for condo approval. A lender can help check this early.

How does the resale market look?

Ask how similar units have sold recently and how long they stayed on the market.

These questions help avoid surprises. They also make it easier to compare one condo or townhome community with another.

The bottom line for first-time buyers

High home prices have made buying feel harder, but the search may not be as limited as it looks. Condos and townhomes can open the door to more choices, more flexibility, and a more realistic path into ownership.

With more condos and townhomes on the market nationally, buyers who expand their search may find options they were missing before. The right property type can lower the barrier to entry, reduce maintenance demands, and make the first purchase feel less overwhelming.

A detached single-family house may still be the goal someday. But the first home does not have to check every future box. It needs to be affordable, livable, and aligned with the next chapter.

For many buyers, a condo or townhome can do exactly that.

This content is for informational purposes only and should not be taken as financial advice. Buyers should speak with a qualified real estate professional and lender before making a purchase decision.