The classic American starter home — detached, single-family, with a yard — is out of reach for a lot of people. So some younger buyers are skipping it entirely.

What's Driving the Shift

Single-family home prices are still sitting above $400,000 nationally. Mortgage rates haven't dropped enough to make a meaningful dent. And the US housing shortage just grew to more than 4 million homes, according to a new Realtor.com report. A household needs to earn nearly $86,000 a year just to afford a median-priced starter home.

Townhouses offer a way around that math. They're typically priced lower than detached homes, require less maintenance, and still give buyers something an apartment can't: walls that don't share a floor or ceiling, sometimes a small yard, and the ability to build equity.

The Numbers Back It Up

Townhouse construction hit a multidecade high market share of more than 18% of single-family starts in 2025, according to the National Association of Home Builders. And it's not builders guessing — buyers are asking for them. NAR's 2025 homebuyer report found that 10% of buyers under 34 purchased a townhouse, the highest share of any age group.

The broader picture is sobering, though. NAR found the share of first-time buyers fell to a record low of just 21% of all purchases. The median age of a first-time buyer hit 40 — up from the late 20s in the 1980s. Buying at 40 instead of 30 costs the typical buyer roughly $150,000 in lost equity over a lifetime.

What Younger Buyers Are Actually Getting

For buyers priced out of single-family homes, the townhouse trade-off usually works like this: less square footage, shared walls, and often an HOA — but lower price, lower maintenance, and a foot in the door.

That last part matters most. Homeownership is still the primary way most Americans build long-term wealth. Getting in at $280,000 in a townhouse beats waiting another five years for a detached home that costs $100,000 more.

The dream home can come later. Right now, a lot of younger buyers just want in.