Why Townhomes Are Gaining Popularity with First-Time Buyers

Buying your first home is exciting — but it can also feel overwhelming when affordability doesn’t quite line up with expectations. You may be financially ready, but finding a home that fits both your lifestyle and your budget can be the real challenge.

That’s one reason townhomes are getting so much attention right now.

As housing supply evolves, townhomes are becoming a larger share of new construction. And for many first-time buyers, that shift is creating a more realistic and attainable path to homeownership.

More Townhomes Are Being Built Than Before

Builders are leaning into townhome construction in a way we haven’t seen in decades. According to the National Association of Home Builders (NAHB), nearly 1 in 5 newly built single-family homes today is a townhome — the highest share on record.

To put that into perspective, about ten years ago, townhomes made up closer to 1 in 10 new builds.

That increase means more options for buyers who may have felt priced out of the traditional single-family market. And more choices often translate to better opportunities.

Why Townhomes Make Sense for First-Time Buyers

1. They’re Typically More Affordable

While pricing varies by market, data from Redfin shows townhomes are generally less expensive than detached single-family homes nationwide. And the price gap has widened in recent years.

One key reason is size.

Most modern townhomes range from about 1,300 to 1,500 square feet. Their smaller footprint makes them less expensive to build — and typically more affordable to purchase. Lower purchase prices can also mean more manageable monthly payments.

As Ali Wolf, Chief Economist at NewHomeSource, explains:

“With the high cost of housing across the country, townhomes have emerged as a vital, more accessible entry point into homeownership. They are often priced lower than detached houses, offering buyers — especially first-timers and young professionals — the chance to build equity without stretching their budget.”

For many buyers, that balance between affordability and ownership is key.

2. Builders Are Offering Incentives

Another factor working in buyers’ favor is builder motivation.

With inventory levels improving compared to recent years, many builders are eager to move completed homes. That can create room for negotiation — whether through price adjustments, closing cost assistance, upgrades, or mortgage rate buydowns.

According to the National Association of Realtors (NAR), a significant percentage of builders recently reduced prices or offered incentives to attract buyers, particularly first-timers.

That flexibility can make the path to ownership smoother and more financially comfortable.

If buying your first home feels just slightly out of reach, the solution may not be waiting longer — it might be considering a different type of property.

Townhomes offer:

• A lower entry price point

• More new construction options

• Potential builder incentives

• An opportunity to build equity sooner

  
  

For many first-time buyers, that combination makes them one of the most practical options in today’s market.

You don’t always have to compromise your goal of homeownership — sometimes you just need to explore the right fit. If you’re wondering whether a townhome could work for you, connecting with a local real estate professional can help you evaluate your options and see what’s available in your area.