Townhomes, condos can be best move for first-time buyers

First-time home buyers are facing the most challenging market in a generation, housing experts say.

With mortgage rates very dynamic, still-high home prices, and still-low inventory levels, the monthly cost to own a home—especially for those who haven’t built equity by owning already—has never been higher.

For many newbies, it might just be a matter of making a shift toward something they can better afford—like a condo or townhome. These lower-cost homes have historically been a stepping stone for buyers looking for a less expensive alternative to a single-family home. And now is no different.

Condos and townhomes are typically priced at about 5% to 7% below the price of a single-family home—sometimes much more—though they appreciate a bit more slowly.

“Condos can help prospective homebuyers who perhaps have a smaller budget, but who are really determined to get a foothold in the market and start to accumulate some equity,” says Realtor.com senior economic analyst Hannah Jones. “It can be a really great entry point.”