Is It Best To Buy a House, Condo, or Townhouse?

When buying a home, most people think first about location and, of course, price. But another important decision is home type — i.e., deciding between a single-family home, a condominium, or a townhouse.

Should You Buy a House, a Condo, or a Townhouse?

Buying a condo, a townhouse, or a single-family home has a big impact on your lifestyle. It determines how much control you have over making changes to your home, and how much maintenance you’re responsible for.

A condo is like an apartment, in that it’s one unit within a larger building or residential complex. What’s different is you own it instead of rent it.

A single-family home is a stand-alone house with space surrounding it.

A townhouse is a combination of the two. Like single-family homes, townhouses are often multileveled and have outdoor space. You own the interior and exterior of the home, as well as the yard space, and are responsible for maintaining all of it. Like condos, townhouses share walls with other homes, usually as part of a row.

The type of home you choose also influences how much you pay. On top of this, you may need to pay dues to a homeowners association that maintains and manages spaces and services for the larger community.

Condos

If you want to be part of a community, have fewer maintenance responsibilities, and enjoy access to shared amenities, then a condo might be right for you. That said, condos often are smaller, and you own and control only the interior of your unit.

What is a condo?

A condominium, or condo for short, is a unit in a building or residential complex with common areas and shared amenities, such as gyms, swimming pools, event spaces, parking, and security. It’s like an apartment, but you own the unit instead of renting it.

So, how do condos work? You get to enjoy the amenities and common spaces, and only need to maintain the interior of your unit. You pay fees to an HOA that uses the money to maintain the common spaces, amenities, and building exterior on the community’s behalf.

How much does a condo cost?

Condos often are cheaper than townhouses and single-family homes because you only own what’s within the walls of your unit. You usually pay less in homeowners insurance and property taxes, but you do need to pay HOA fees, which vary depending on the property and aren’t optional.

The price of a condo depends on the property and the area, but below are some of the costs you can expect to encounter.

Upfront costs

Upfront costs of a condo purchase include:

• Down payment. How much you’ll be required to put down on a condo will vary, and some condo associations will limit how much you can finance the purchase. You should be prepared to put at least 10% down on a condo purchase.
• Closing costs. The closing costs on a condo are similar to the closing costs on townhouses and single-family homes, which typically are 2% to 5% of the purchase price. In the second quarter of 2023, the median sales price of condos in U.S. metropolitan areas was $353,900.[1] That means you generally can expect closing costs on a condo to be between $7,078 and $17,695. Prorated HOA dues also will be included.

Ongoing costs

Ongoing costs of a condo purchase include:

• Monthly mortgage payment. This cost will depend on your mortgage rate and the cost of the condo.
• Property taxes. Condos are subject to the same property taxes as single-family homes, though owning less square footage means that you typically will pay less. You also share responsibility with other residents in your community for property taxes on the common areas and land.
• Condo insurance. This type of insurance works similarly to homeowners insurance in that it covers your personal belongings and the home’s interior. However, it doesn’t cover the condo’s exterior or garage.
• HOA fees. These fees also may be called condo fees. Condo developments typically provide access to more publicly shared amenities than single-family homes or townhouses. As a result, you can expect higher fees.
• Some utility bills. Shared utilities are covered by your HOA fees. However, you typically are responsible for paying for the utilities you use within your condo unit.
• Interior maintenance. The HOA maintains the exterior of your condo, but you’ll be responsible for maintaining the interior.

Pros and cons of buying a condo

Here are some of the benefits and drawbacks to condo ownership.

Is a condo right for you?

Buying a condo vs. a house is a good idea for first-time homebuyers, or for couples who aren’t ready to start a family or don’t plan to have children. Condos can be an affordable way for first-time buyers to get their foot in the door and begin building equity, and often are in desirable locations. Just keep in mind that condos — like apartments — mean living in close proximity to other people.

Townhouses

Townhouses offer a middle ground between condos and single-family homes. You should expect that any yard space you have will be small, and your home will share walls with other buildings.

What is a townhouse?

Townhouses share one or two walls with other homes, and usually are built in a row. They are individually owned and sometimes part of an HOA that takes care of community services, such as garbage pickup.

Unlike with a condo, you control the exterior of your home and are responsible for maintaining it.

As with a single-family home, living in a townhouse can mean having some outdoor space in the form of a yard.

How much does a townhouse cost?

Townhouses typically cost more than condos but less than single-family homes. Any HOA fees for a townhouse will likely be less than for a condo, since townhouse owners maintain the exterior of their unit, and there generally are fewer amenities.

Townhouse prices vary, but you can expect the following upfront and ongoing costs.

Upfront costs

Upfront costs of a townhouse purchase include:

• Down payment.You typically can expect your down payment for a townhouse to be more than a condo, but less than for a single-family home.
• Closing costs. If your townhouse is part of an HOA, your closing costs will include prorated HOA fees.

Ongoing costs

Ongoing costs of a townhouse purchase include:

• Monthly mortgage payment. Financing a townhouse is similar to financing a single-family home, but your mortgage payment likely will be smaller.
• Property taxes. If you buy a townhouse, you’ll pay property taxes on the home and the land. However, townhouses are usually smaller than single-family homes, so you’ll likely pay less.
• Homeowners insurance. You need to pay for homeowners insurance, or condo insurance if your townhouse is part of a condo association.
• HOA fees, if applicable. If your townhouse is part of an HOA, you’ll pay monthly fees.
• Some or all utility bills. You may share amenities and utilities with neighbors if your townhouse is part of an HOA. Your HOA fees typically cover shared services, which can include things like trash collection.
• Interior and exterior maintenance. Unlike with a condo, you’ll need to maintain both the interior and the exterior of the townhouse.

Pros and cons of buying a townhouse

If you want more space and privacy than a condo offers, but can’t afford a single-family home, then a townhouse could be a good option. Below are some of the upsides and downsides to owning a townhouse:

Is a townhouse right for you?

Townhouses offer a compromise between condos and single-family homes. You have more freedom than with a condo, but don’t have all the responsibility of owning a single-family home. However, that also means missing out on the total control of your environment that owners of single-family homes have.

Single-Family Homes

If you’ve always dreamed of owning a house with a big yard, then you may have your heart set on a single-family home. Keep in mind that houses come with greater costs and responsibilities.

What is a single-family home?

The term “single-family home” refers to a stand-alone house. It’s often depicted as the classic, idealized version of homeownership.

Like with townhouses, single-family homes usually have yard space. When it comes to townhouses vs. houses, however, a key factor is that single-family homes have space on all sides of the dwelling and stand apart from other homes.

As with condos and townhouses, single-family homes can be part of an HOA — and it’s becoming more common. According to U.S. Census Bureau data, 84% of new single-family houses sold in 2022 were part of an HOA, compared with 64% in 2010.

How much does a house cost?

A single-family home typically costs more than a townhouse or a condo because it is usually bigger and comes with more land. Additionally, you’re responsible for all upkeep and repairs.

The cost of a single-family home depends on several factors, including size and location. Here are some of the main costs of owning a house.

Upfront costs

• Down payment. In September 2023, the median sales price of existing single-family homes was $399,200.[2] A 10% down payment on this price tag would be $39,920.
• Closing costs. If closing costs total 2% to 5% of the median sales price, you should be prepared to pay $7,984 to $19,960.

Ongoing costs

• Monthly mortgage payment. The median mortgage payment for a single-family home in the second quarter of 2023 was $2,051, according to the National Association of Realtors.
• Property taxes. How much you’ll pay in property taxes varies depending on where you live. Owners of single-family homes paid an average of $3,901 in property taxes in 2022.[3]
• Homeowners insurance. This covers both the interior and exterior of the property.
• HOA fees, if applicable. While not all single-family homes are part of an HOA, it’s becoming more common with new builds. You can expect HOA fees for a single-family home to be around $250 a month.
• Some or all utility bills. Unless your home is part of an HOA, you are responsible for paying for all utility bills.
• Interior and exterior maintenance. You’re responsible for maintaining the interior and exterior of the home.

Pros and cons of buying a single-family home

If you have kids or pets — or both — the yard space and relative privacy of a single-family home are attractive. Below are some advantages and disadvantages to buying a house:

Is a house right for you?

Buying a house is usually a good idea for people who have — or plan to start — a family. It gives you the most space and control over your environment. However, a house is more expensive and requires you to take greater responsibility for maintenance.

The Cost Differences Between Condos, Townhouses, and Single-Family Homes

The purchase price of your preferred home type isn’t the only cost difference you need to consider. For example, you might not pay HOA fees when you own a single-family home, but you have to maintain the landscaping yourself — or pay someone to do it for you.

Here’s how certain costs vary based on the type of home you buy.

Mortgage

The purchase price of your home influences different aspects of your mortgage, such as the down payment, closing costs, and size of your loan. So, choosing a more expensive home type could result in greater difficulty putting 20% down — which is required to avoid private mortgage insurance on a conventional loan — as well as higher expenses over time in the form of interest on your mortgage.

A mortgage calculator can help you figure out how much home you can afford.

Compared with buying a single-family home or townhouse, purchasing a condominium can be more complicated. That’s because condo financing may be subject to restrictions, depending on the property, and whether it’s a warrantable vs. nonwarrantable condo.

A warrantable condo is one that meets Fannie Mae and Freddie Mac guidelines. A condo is deemed nonwarrantable when lenders determine that it’s too risky of an investment, based on factors such as whether the building or community has too much commercial space or allows short-term rentals.

If you’re interested in a government-backed loan, the Federal Housing Administration keeps a searchable database of FHA-approved condo projects. You also can request a customized condo report with a list of projects approved by the Department of Veterans Affairs.

Homeowners insurance

With less space in a condominium, you may be able to save on condo insurance. Condos also can be cheaper to insure because the policy only needs to cover the interior of the home.

Similarly, condo owners don’t need to pay for liability coverage outside of their units. The overall building would have its own insurance policy to cover the rest of the property, says Michele Hass, president of Brooklyn MLS, a platform for real estate agents in New York City.

Homeowners insurance for townhouses and single-family homes, on the other hand, must cover the entire property.

Home resale value

The resale value of your home depends on market conditions at the time you put it up for sale, plus how well you’ve maintained it.

If you’re looking for the best resale value overall, a single-family home is the safest bet, says Simon Isaacs, owner and broker at Simon Isaacs Real Estate in Palm Beach, Florida.

“I believe houses have better long-term resale value followed by townhouses and condos,” Isaacs says.

With a condo, you have less influence over your home’s resale value because you can’t control how the building or residential complex is maintained. However, that also means you won’t have to do as much to protect the value of your home, since you aren’t responsible for the exterior and common spaces.

HOA rules and fees

No matter what type of home you live in, you must abide by your HOA’s rules. Breaking them can result in unpleasant consequences, like a fine or ban on using some of the community’s amenities.

HOA rules vary significantly by home type. Condos tend to have the most constraints, from pet and rental guidelines to limitations on the remodeling you’re allowed to do.

Fees for condos also are typically higher because the HOA takes care of maintenance for your home’s exterior, as well as the larger building or residential complex. Condos also tend to offer a variety of amenities that hike up fees.

With townhouses and single-family homes, you can expect to pay lower HOA fees because you’re in charge of maintaining your home’s exterior and the surrounding property — but this also depends on what services are provided by the HOA.

How To Decide Between a Condo vs. Townhouse vs. House

When deciding between a condo vs. house vs. townhouse, it really comes down to your priorities. If you want to become a homeowner without having to deal with exterior maintenance or landscaping, a condo may be a better fit than a house.

“Condos are best fit for working professionals looking for smaller spaces and convenience of the amenities that might be present in the building, young couples buying their first place, and retired couples that are looking to downsize,” Hass says.

On the other hand, single-family homes offer perks like increased square footage — both inside and outside of the home — as well as more freedom to do what you want with the property. This can mean higher costs and a less central location, but for some people, the trade-offs are worth it.

“I would recommend a single-family home for those clients who have young families and/or love the freedom of having their own space and backyard,” Isaacs says. “While there is more upkeep, there is something to be said for having the space to entertain, and personalizing your backyard.”

For certain homebuyers, townhouses offer the best of both worlds: more space and reasonable costs.

Below is a snapshot of how homeownership costs can vary based on home type:

Here are some factors you’ll want to consider when deciding which type of home to buy:

• Finances. Evaluate your income and debts to see what type of home fits your budget. Remember that townhouses are generally less expensive than single-family homes, and condos may offer amenities that otherwise might be unaffordable if you buy a house.
• Location and community. A condo or townhouse can make it affordable to live in a more central neighborhood.
• Lifestyle. If you commute to work every day, then a condo or townhouse may be closer to your job and save you time and gas money. But, if you need more space for your family, then a house would be a better fit.
• Rules and regulations. If you choose a condo, be ready to accept the rules set by your HOA. Townhouses and single-family homes also can be part of HOAs, though the rules usually are less restrictive.
• Fees. Condos, as well as some townhouses and single-family homes, require that you pay HOA fees. These fees tend to be pricier for condos because they cover more expenses, such as maintaining the building.

Other Types of Homes To Consider

While condos, townhouses, and single-family homes are among the most common types of homes you’ll find on the market, there also are alternatives. Here are some other types of homes to consider:

• Patio home. These types of homes typically share a wall with another patio home and only have one story. They’re good for older homeowners or first-time homebuyers.
• Brownstone. These iconic row houses are typically three to five stories tall. They are especially popular in New York City.
• Loft apartment. A loft apartment is one spacious room with a tall ceiling and features like exposed brick. It’s often the result of repurposing commercial building spaces into living areas.
• Modular home. While traditional single-family homes are built on-site, modular homes are built in a factory and installed at the desired property’s location.
• Manufactured home. As opposed to modular homes, manufactured homes are assembled at a factory and shipped in one piece. When you buy a manufactured home — formerly known as a mobile home — you’ll likely have to rent the land that the home sits on.
• New-construction home. This refers to a recently built home with no previous owner.
• Mansion. There are no official requirements for a home to be considered a mansion, but it’s generally defined as a house that’s 5,000 square feet or larger, with luxurious features and amenities. This is one of the most expensive options for a new home.

FAQ: Condo vs. Townhouse vs. House

Here are some frequently asked questions about deciding on which type of home to purchase.

The Bottom Line on Buying a Condo vs. Townhouse vs. House

Condos, townhouses, and single-family homes all offer the satisfaction of homeownership, a place to plant roots, and the opportunity to make a financial investment. However, each has benefits and drawbacks. When you’re shopping for a home, be sure to weigh how much space you need, where you want to live, and how much you’re willing to pay so that you can choose the home type that best suits your needs.

Rory Arnold and T.J. Porter contributed to the reporting of this article.