Forget the white picket fence: Is buying a townhouse the new American dream?

When Alisa Newman was house shopping earlier this year, she didn’t fantasize about a white picket fence surrounding a single house. Instead, she chose a townhouse.

“I decided on a townhouse because I’m single and growing up, and I’m drawn to the prospect of less maintenance than a detached house,” she says.

Newman, who moved to Delaware, adds that her previous home in Coral Gables, FL, was a maintenance nightmare — especially during hurricane season.

“The community I’m buying in has an HOA that will take care of lawn care and snow removal,” she says.

But it wasn’t just the low maintenance that caught Newman’s attention; it was also the price. At $620,000 for three bedrooms and 2.5 baths, it was much more affordable than single-family homes in the area.

And since it was new construction, she was able to order it to her specifications, asking for hardwood floors throughout rather than carpeting, a luxurious master bath, an upgraded kitchen and bath, and a security system. She even received $10,000 in cash for closing costs.

Having less personal space in nature now also doesn’t bother him because “it means less to take care of.”

Her only concern is simple: sharing walls with strangers.

“I’d like to know if the Rolling Stones or a family of 10 kids is going to be 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.”

Townhomes: 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 more difficult for the average American.

Many experts say the housing shortage is the main problem, so developers are building housing as fast as they can. Single-family home construction rose 16% in September.

But what if the solution wasn’t more houses, but smaller, more compact houses?

Enter the town house.

A townhouse — defined as a home where at least two stories share a wall with another home — may lack the space and privacy of a single-family residence, but it has a lot more for those who need a most affordable entry point to home ownership.

“At current interest rates and assuming a 10% down payment, that’s a savings of about $185 a month,” says Realtor.com® economist Joel Berner.

And these 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 on single-family homes,” says Berner. “They tend to be in downtown Atlantic markets where single-family homes are expensive. In these hot spots in the city, townhomes or townhouses offer the best of both worlds: proximity to desirable parts of the city and the opportunity to own a piece of property at a more affordable price.”

In fact, there are seven ZIP codes where townhomes sell for over 50% off single-family homes. The largest discount is in Raleigh, NC, where a townhome costs an average of $463,335. Meanwhile, a detached single-family home will set you back about $2,499,250 — making townhomes here 81.46% cheaper.

Why the suburbs love townhomes

While many urban areas such as Baltimore, Philadelphia, Boston and New York City have always been fans of townhouses, the suburbs have caught on at this point.

Land is no longer plentiful and free, not even roads in rural areas. Developers have to make their investments count, and builders can put many more townhouses on a single plot of land than single-family homes. Multifamily buildings are more environmentally friendly, requiring far less clearing of forests or farmland.

Year-to-date starts on 2- to 4-bedroom unit projects (typically townhouses) are up 31.5% nationwide year-over-year, while single-family starts are up just 10.1%.

“The future of townhome sales looks strong at least in terms of the volume of units coming on the market,” says Berner.

The benefits of a townhouse

Some new home buyers are already into the new American dream.

Jacob Austin, who bought a home at KB Home on a St. Augustine, FL, development called Orchard Park, says he was happy to say goodbye to his only residence.

“I appreciated how low-maintenance a townhouse is,” he says. “The townhouse I live in is very spacious and single-family-like 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, building improvements to block noise can help mitigate these potential issues.

“Some of the concerns I hear are that you share a wall with your neighbors and buyers are concerned about the noise,” says KB Home sales consultant Marianna Herman. “But we use great products and sound barriers that help eliminate a lot of the noise you can hear, so our homebuyers are happy with how quiet the home can be.”

Nearby neighbors can even be part of the townhouse’s appeal, says architect James Schaefer, who specializes in designing them.

“Townhouses combine what’s attractive about single-family homes—a garage, a yard, multiple bedrooms—with community and closeness to neighbors,” he says.

Noise aside, however, Boese says townhouse owners may encounter other problems that a single-family home wouldn’t present.

“If the roof is shared or connected with your neighbour, then life can be difficult if the roof needs to be replaced but the neighbor won’t share the cost or doesn’t want to replace their part,” she warns.

She tells of a client who was trying to sell his unit, but photos of the roof clearly showed that it had only been replaced up to the neighbor’s line.

“You can see the difference,” she says. “It makes it harder to sell, knowing that one has such a difficult neighbor.”

She advises looking for a townhouse where the roof and exterior walls are individualized so that each owner can maintain their individual sections.

Also, most townhome developments come with homeowner association fees. Make sure you read your HOA agreement thoroughly and know what your fees do and don’t cover.

Will the townhouse outlast the single family home?

An op-ed in the Wall Street Journal suggests that people should forget the “outdated” idea of ​​a large single-family home in the suburbs and consider the townhouse instead.

But will the townhouses really conquer people’s minds and hearts?

Lawrence R. Samuel, author of Home Ownership in America, notes that in the 1960s, condos were valued as a way for everyone to enjoy home ownership, while in the late 1970s, it was the mobile home. Recently, the popularity of the tiny house can be seen.

None have ended the rule of the single-family home.

“I don’t foresee any other form of housing, including townhouses, usurping the single-family home,” he says. “It aligns ideally with the core American values ​​of independence and private property.”

He adds, “For better or worse, the image of the suburban home, complete with a white picket fence and a backyard, is forever etched in our minds.”