The Next Big Housing Trend May Be Small
Recent data shows the next most popular single-family home may be a townhouse. National Association of Home Builders (NAHB) chief economist Robert Dietz noted that over the past year, “the single-family attached market is up 24%. It’s growing eight times as fast as the overall single-family market.” Rising home prices, limited land ability, and an influx of first-time home buyers are some of the major reasons townhouses are becoming more popular.
Among the challenges new home builders have faced over the past few years are limited land availability and affordability concerns. Although home price appreciation started to slow down during 2018, some would-be first-time home buyers have been priced out of the market in recent years. Rising home prices means rising down payment costs, and young renters simultaneously paying down student debt and skyrocketing rents have struggled to set aside down payment savings. Townhouses present a more affordable option for first-time home buyers. Dietz commented, “townhouse construction tends to be a little smaller and more entry-level-market and more dense. We see this as a growth potential for the home building market.”
In addition to providing an affordable option for first-time home buyers, townhouses are also preferred by some empty nesters looking to downsize. When seniors move from larger detached single-family homes to a townhouse community, they often benefit from having less home and yard to take care of and the closer proximity to neighbors and city centers can create more opportunities for support and socialization. Some young families may also choose townhouses over detached single-family homes, when they are located in better school districts.
According to the Zillow Housing Aspirations Report, 94% of survey respondents said that if money were no object, they would own their own home and 64% agreed that owning a home is a “key to a higher social status” and “necessary to live the American Dream.” In some cases that American Dream may be a ranch-style house with a big yard and a Golden Retriever, and in other cases it may be a townhouse closer to work with lawn maintenance and a French Bulldog.
Homeowner preferences vary and I specialize in finding the right loan for every home. Whether you’re looking for a detached single-family home, townhouse, or even a condo, I can help you choose a mortgage that will help you achieve your current and future financial goals.