Single-Family Home Vs. Townhouse: Which Is Right for You?

Embarking on the homebuying journey means making plenty of decisions. What location do you want to buy in? How much are you willing to spend? What are you looking for in a house? 

You’ll also need to decide what type of property you’re looking for, such as a single-family home or a townhouse. We’re here to give an overview of the similarities and differences of these two popular home types, so you can decide on single-family home vs. townhouse for your future.

Defining a Single-Family Home Vs. Townhouse 

In order to understand the differences between a single-family home vs. a townhouse, it’s helpful to start by defining both types of real estate.

What’s a Single-Family Home?

A single-family home describes a freestanding unit on its own piece of property. Because it is a freestanding property, it does not have any shared walls with neighbors. Single-family homes are designed to accommodate one owner and be used as a single-dwelling unit designed for occupancy of one household. 

What’s a Townhouse?

Unlike a single-family home, townhouses are attached to one another and have at least one shared wall with neighboring properties. Despite the shared wall, each townhouse has its own entrance. Typically, townhouses are narrow, vertical properties and have two or three levels.

Differences Between Single-Family Home and Townhouses

Now that we’ve defined what a single-family home vs. townhouse is, let’s take a closer look at some of the defining features that differ between these types of real estate. Read on to learn more about some of the main differences between a single-family home and a townhome. 

Pricing 

Perhaps one of the most significant differences between townhouses and single-family houses is the price tag. Townhouses are generally more affordable — in 2022, the median price for a townhouse in Florida, for example, was $306,500, while the median price for a single-family home was over $400,000. Townhomes tend to be priced lower because they typically offer less space and privacy as compared to detached houses. 

Proximity to Neighbors

Another difference worth noting between a single-family home and townhouse is the proximity to neighbors and other buildings. A townhouse is attached, which means that it shares at least one common wall with another similarly-structured home. Meanwhile, a single-family home sits on its own lot and does not have any shared walls with the unit next door. 

Living Space

A single-family, detached house typically has more square footage than a townhouse, which means there’s a good chance they will also have more bedrooms and bathrooms. Meanwhile, a townhouse is typically smaller than a single-family house and offers less square footage. ‍

Similarities Between Single-Family Home and Townhouse

While single-family homes and townhouses have many differences, they also have some similarities. Here are some key similarities to keep in mind when considering which type of property to purchase. 

Resale Value

Regardless of which type of home you decide to buy, both townhouses and detached houses could potentially have good resale values should you choose to resell. Between the third quarter of 2021 and 2022, house prices increased in all 50 states, with several recording over 15% growth. A townhouse or single-family home might be a good option for an investment property. 

Homeowners Associations

There’s often a good chance that single-family and townhouse communities have an HOA, or homeowners associations. A homeowners association is a self-governing organization, typically made up of members of the community, that is responsible for enforcing rules for living in the community, such as noise complaint policies or parking guidelines. 

Pros and Cons of Single-Family Home Vs. Townhouse

After looking at some of the defining characteristics that separate a townhouse from a single-family home, it’s helpful to consider the pros and cons of each so you can decide which option is best for you and your needs.

Pros and Cons of Buying a Single-Family Home

There’s plenty of pros of living in a single-family home, including the following:

• More privacy: A single-family home is a detached house, which usually provides homeowners with more privacy. You’ll also typically have a larger yard and more square footage. 
• More flexibility: While many single-family residence communities have HOAs, HOAs typically do not play a significant role in homeowners’ daily lives. Homeowners have flexibility when it comes to modifying and changing the appearance of their homes. 

Some of the cons of living in a single-family home include: 

• Higher purchase price: The main disadvantage of purchasing a detached house is the higher price, which will result in a larger mortgage. Be sure to find a home that meets your needs and fits your financial situation. 
• Housing taxes: In addition to higher purchase prices, those purchasing a single-family home should also prepare to pay higher housing or property taxes. This is because taxes are calculated based on the value of a home. 

Pros and Cons of Buying a Townhouse

Here are some pros to keep in mind if you’re considering buying a townhouse.

• HOA and amenities: One perk of buying a townhome is that most townhouses are built in communities that come with a homeowners association and shared amenities. Amenities might include shared swimming pools, parks, or community clubhouses. HOAs for townhouse communities often pay for services, such as landscaping, which can mean less maintenance for the homeowner. 
• Sense of community: Townhouses have at least one shared wall, which means that you’ll be living closer to your neighbors. Townhome communities also commonly have shared spaces and events or activities that can help residents foster a sense of community and a greater sense of security.

Keep these cons in mind if you’re considering buying a townhouse: 

• Higher maintenance fees: Townhouses are traditionally overseen by homeowners associations, which means that you will be responsible for paying HOA fees. Fees will vary depending on where you live, but can range from hundreds of dollars to $1,000 a month or more.
• Less flexibility with your home design: Because most townhouses are overseen by a more involved HOA than single-family home communities, there will be rules that community members are required to follow. These might include parking restrictions or landscaping guidelines. Remember to thoroughly read through the HOA rules so you can know what to expect.

How Do I Decide Which Option Is Right for Me?

When it comes to homeownership, it can be difficult to decide on the best option. Here’s some things to keep in mind when figuring out which type of home is right for you.

Think About What Makes Sense Financially

Since single-family houses typically cost more than townhouses, you’ll want to carefully consider your budget when pursuing homeownership. You can use a home affordability calculator to figure out the amount of house you can afford to buy based on your income and current debts. Some financial experts recommend that you save at least 20% for a downpayment and avoid spending more than 2.5 times, or 28%, of your gross annual income on a mortgage. 

First-time buyers should also be aware that they will need to pay closing costs, which typically comprise 3% to 6% of the loan amount. That means for a home purchase of $800k, you should plan on paying $24k to $48k.

In addition to paying for the mortgage, keep in mind that homeowners are also responsible for paying other fees. These usually include: 

• Monthly HOA fees (if applicable)
• Property taxes
• Home insurance 
• Utilities and repairs

Consider Your Long-Term and Short-Term Needs

After looking at your budget and getting a better understanding of your financial options, you’ll also want to consider your long-term and short-term needs and wants. Set aside some time to sit down and make a list of your wants and needs. Is having a backyard space important to you, or is a patio sufficient? Have you considered buying a condo? How many bedrooms and bathrooms do you need? By answering these questions and conducting this assessment, you’ll be one step closer to finding a new home that fits your needs.

Get Ready to Buy With Aalto Today

Deciding which property is the right fit for you can be difficult — but Aalto is there to guide you through the process from start to finish as you’re making a home purchase. Through our innovative self-service platform, we're transforming the real estate process. 

Instead of going through the traditional route of hiring a real estate agent, we work directly with sellers and buyers to guide them through the process. Potential buyers will have direct access to hundreds of available homes for sale, including exclusive and off-market listings. By working with Aalto, you get direct access to information on the home, such as disclosures and pricing analyses, and when you buy with Aalto you can get up to 1.5% cash back on any home.

At Aalto, we are committed to giving you the modern buying experience you’ve been waiting for. Our licensed team is there to answer questions that may come up during the home purchase process, whether you’re interested in learning more about townhouse communities or exploring the difference between a condominium vs. a townhouse. If you’re ready to start your journey to homeownership, contact Aalto today.