Skip to Main Content

What is a townhouse?

What is a townhouse?
Bruce Yuanyue Bi/Getty Images

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

Townhouses have been around for centuries, but the number of new townhouse builds has been steadily declining in recent years. In 2020, townhouses comprised 11 percent of single-family new construction, down from nearly 14 percent in 2008, according to an analysis from the National Association of Home Builders.

Still, townhouses can be a great option for homebuyers who enjoy living close to their neighbors.

What is a townhouse?

Townhouses are a style of multi-floor home that share one to two walls with adjacent properties but have their own entrances. In the suburbs, townhouses are often uniform homes built in a distinct community that might have its own homeowners association. Newer urban townhouses might also have a uniform look and an association, but older townhouses in cities tend to be more traditional rowhomes that can stretch for city blocks with less-restrictive or no HOAs.

Townhouse vs. condo vs. apartment: What’s the difference?

A townhouse is one of many styles a home can be, so it can technically be a condominium if it’s part of a condo community with the associated rights, or a single-family property or planned-unit development (PUD). Condos can come in a range of styles, such as townhouses, a larger high-rise building with units on each floor or a garden complex of one-story units. Condos are individually owned, but might also be rented to tenants.

Apartments, by comparison, are typically commercial rental units owned by a corporation, and everyone in the complex rents — although in some places, you can own an apartment and rent it to tenants, as well.

Pros and cons of buying a townhouse


  • Cost: If you’re considering a townhouse that shares walls with other townhomes, it can be less expensive to buy than a detached single-family home in the same area, even if they have a similar square footage. “You can get a lot of space close to the cities when you’re only paying for the inside of the house and not the acreage of the yard of a single-family home,” says Ben Hoefer, a broker with John L. Scott Real Estate in Seattle. “It can be a cost-effective way to get more of what you want.”
  • Maintenance: The smaller size of a townhouse means that it requires less maintenance. If there’s an HOA, it might take care of the exterior maintenance on the property, as well.
  • Amenities: Townhouses built as part of a development might include amenities such as a pool or clubhouse.
  • Outdoor space: Townhouses often come with access to a small amount of outdoor space or a patio and possibly a private garage.


  • HOA: Some people don’t like to live with the restrictions put in place by an HOA, which might include rules about what colors of paint you can use on your patio or which types of windows you’re allowed to install. HOAs also charge monthly fees, so you’ll need to factor that expense into your budget.
  • Noise pollution: Since you’ll likely be in close proximity to your neighbors, you might have to deal with more noise and traffic than you would in a detached single-family home.
  • Multi-floor living: Multi-floor living may not be sustainable for everyone. “They are usually pretty vertical,” says Paul Gorney, a Realtor and team leader with eXp Realty in Chicago. “It can be an issue for some older homeowners.”

7 tips for buying a townhouse in 2021

1. Consider your budget

As with any home purchase, you’ll need to ensure that you can comfortably afford a townhouse before you start shopping for one. Make sure your budget includes not only the cost of the property itself but also your HOA payments, if applicable. Keep in mind that townhouses are subject to the ebb and flow of the broader real estate market, which means that prices have risen sharply over the past year. The limited supply of available inventory means that a townhouse — just like other properties — will cost more in 2021.

2. Make a must-have list for the community

You probably already know what you want from the house, in terms of bedroom size, layout and other factors. With a townhouse, it’s important to also consider what you’d like in the community, such as a community pool, a less-restrictive HOA or a security gate at the entrance.

3. Perk up your ears

Shared walls mean it might be possible to hear what’s happening in your neighbor’s house, and vice versa. When you’re checking out townhouses, listen carefully to see how much sound travels from next door. If you’re able to purchase an end unit, you’ll only have to worry about half the noise, but these typically have more windows and can cost more as a result.

4. Check out the common areas

If you’re planning to use the community gym or a game room, view them before you make the purchase so you know exactly what you’re getting.

5. Talk to your future neighbors

It’s always a good idea to talk to potential neighbors when you’re considering buying a home. It’s particularly important when buying a townhouse, since you’ll likely be in closer proximity to them. Ask them what they like about the area and if there are any HOA issues you should know about.

6. Read the HOA rules

Homeowners associations can restrict everything from the color of your door to whether you’re allowed to park in your own driveway (as opposed to your garage). Make sure you’re comfortable with the HOA rules — and the financial commitment — before you go ahead with a purchase in any community.

“Some people want more restrictions and a more uniform look throughout the community,” Hoefer says. “Some people want more freedom. The good news is that there are lots of options from different HOAs, so you can find the right one for you.”

7. Think long-term

While a townhouse may make sense for you now, multi-floor living may not work for everyone and at all stages of life. If you’re planning to expand your family or are worried about your ability to traverse steps in the future, you should have a plan for whether you’ll be able to stay in the property.

Who is townhouse living best for?

Many types of homeowners can benefit from townhouses, but they’re a particularly good option for first-time homebuyers or other budget-minded homebuyers.

Find other housing types:

House type Who it’s right for:
Apartment Apartments are suited for anyone looking to stay in a prime location for a cheaper price near shopping, restaurant and entertainment centers, often at a more affordable cost than buying a condo or single-family home.
Condominium Condos appeal to those looking for a lower-maintenance living, home with a sense of security, opportunities to be social with neighbors, among other factors.
Townhouse Townhouses are a particularly good option or first-time homebuyers or other budget-minded home buyers who want more space than typically afforded in a condo.
Modular home Modular homes are enticing to empty-nesters looking to downsize, couples looking for backyard units like tiny homes or families looking to upgrade their dated properties in nice but expensive neighborhoods.
Single-family home Single-family homes are best for families who prefer a huge yard and plenty of room to spread out. Others still prefer a low-maintenance condo or townhome that includes benefits like landscaping, snow removal and exterior maintenance.
Multi-family home Multi-family homes are best for those who are interested in getting into real estate investing and are comfortable with the added responsibility and time commitment that comes with being a landlord.
Bungalow home At between 1,000 and 2,000 square feet, bungalows are a great option for young families looking for a starter home or retirees hoping to downsize in a home without stairs, or single homeowners who want the single-family home lifestyle without managing a huge property.
Co-op Co-ops are most often found in major cities, and they can be good for those looking for security or neighbors who largely adhere to the building’s rules and policies.
Patio home Typically capped at one-and-a-half stories and part of a larger association, patio homes are best for homeowners who don’t want to deal with stairs or maintenance.>
Ranch home Ranch homes are ideal for anyone who prefers single-story living. Singles, couples and families with children can find something to love about a ranch home.
Written by
Beth Braverman
Personal Finance Expert Contributor
Beth Braverman is an award-winning freelance journalist and content producer, writing mostly about personal finance, parenting and careers.
Edited by
Mortgage editor
Reviewed by
Mortgage advisor and author