For today’s first-time homebuyers, getting a toehold into the pricey housing market increasingly means buying a townhome.

Townhomes are making up a growing percentage of the for-sale market around the country, a testament to their relative affordability compared to single-family homes, as well as how homebuilders are leaning into growing demand for cheaper homes and higher-density neighborhoods.

Townhomes are proliferating not only in denser regions where they’ve been a major presence, like Baltimore and Philadelphia, but also in smaller cities from Lancaster, Pa., to Sioux Falls, S.D. They’re likely to become an even bigger part of the market in the coming years: Attached homes made up nearly 20% of single-family housing starts in the third quarter of last year, averaging their highest market share in recent quarters since 1985.

“I’ve been pointing to it as one of the bright spots in a housing market in 2025 that disappointed,” said Robert Dietz, chief economist at the National Association of Home Builders.

Kailen Yost, a real estate agent in Johnstown, Colo., said the dream for most of her buyers is still a detached single-family home. But in the Northern Colorado counties where she works, average prices range from $537,000 to $659,000 — out of reach for many first-time buyers.

“Single-family homes still are probably the most popular option,” Yost said. “First-time homebuyers, though, are definitely leaning in more towards the townhome because it’s more affordable. Single-family is more for that second leap.”

Affordability, with trade-offs

The cost savings for purchasing a townhome instead of a detached single-family home can be substantial. In recent years, through both the pandemic boom and the more recent market freeze, townhomes have been roughly 10% cheaper on average than single-family homes, Realtor.com found.

Townhomes come with trade-offs compared to both single-family options and condos: Like condos, they have shared walls, but like single-family homes, most come with their own yard. Most townhomes require homeowners’ association dues, though they’re often lower than the dues for condo buildings and help cover maintenance.

“It’s positioning itself against single-family homes as an easier maintenance option at a better price,” said Joel Berner, senior economist at Realtor.com. “For people who are willing to sacrifice a big yard, this is an option for them to be able to own a home and live in a way where the HOA is taking care of a lot of things.”

Olivia Evans, 35, is on the hunt for a townhome around Hyattsville, Md. She initially planned to purchase a unit in the condo building where she rents, but hefty association fees give her pause. And the only single-family homes in her budget required serious work.

“I was kind of like, ‘Ok, well, what’s my next-best option that isn’t a fixer-upper, that has everything I need, that’s move-in ready?’ I thought townhouses,” she said.

She’s not alone. Competition for townhomes in Hyattsville, a close-in suburb of Washington, D.C., has been fierce. One townhome she loved had six interested buyers, including one who was willing to waive inspection. She’s looked at new construction options but found many listed for more than $500,000, above what she’s comfortable spending. She’s trying not to get discouraged by the slim pickings as she continues her search.

“I quickly learned how competitive it was,” said Evans, a television production manager. “There’s a glaring gap of homes available for middle- and upper-middle incomes, especially if you’re a first-time, single homebuyer.”

Measures of demand for townhomes show steady interest nationally. For-sale townhomes spend an average of 51 days on the market, according to Realtor.com data going back to 2019, compared to an average of 55 days across all property types. They’ve appreciated more slowly than single-family homes, but prices are still up an average of 51% from pre-pandemic levels, to single-family homes’ 59%.

Yost, in Northern Colorado, and her fiancé bought a townhome of their own last year. While she hopes to eventually own a single-family home, the townhome was a more affordable first step in an expensive region.

“I saw the opportunity to purchase in Johnstown under $400,000, and I was like, ‘We need a run after it,’” Yost said. “We still to this day feel good about our decision because we feel comfortable with the mortgage payment.”

Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.

Sign up for the Mind Your Money newsletter

Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement, and more

Read the latest financial and business news from Yahoo Finance