Why Are Townhomes So Expensive? (11 Reasons Why)

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Brandon Porter

Brandon Porter is an architectural draftsman of 25 years and a self-proclaimed handyman. He loves renovating homes and making them his own, whether it's fixing up the plumbing or painting the walls.

Over recent years, townhomes have gained popularity worldwide among prospective homeowners due to the structural features and functionality they bring to the table.

However, buying a townhouse is not a walk in the park for most people due to the enormous down payment and mortgage costs involved. But why are townhomes so expensive? I embarked on a fact-finding mission about this, and this is what I discovered!

Why Are Townhomes So Expensive?

1. Ownership Rights

Unlike a condo, buying a townhome gives you complete ownership of the house’s interior and exterior space.

A townhome’s combined land ownership right allows you to make any changes you may want to the house, provided you don’t alter the neighborhood’s style.

Nonetheless, it would be ideal to note that some townhomes require owners to follow homeowners’ association rules before making any changes.

A real estate company that sells a townhome to you sells you the house, the patio, and the entire land it sits on.

Thus, townhouses fetch a higher price than other real estate properties since the final price includes interior space, exterior space, and land costs.

2. High Building Costs

Real estate companies must source building materials, such as metal, cement, and ballast, among other materials, to build your townhome.

Some of these building materials are often imported from other countries since some aren’t available in the home countries.

The prices of these building materials have drastically changed over the years due to trade agreements and global political developments.

Consequently, the hiked prices of building materials have directly impacted the cost of building townhomes, leading to the hiked townhome prices.

3. Strict Zoning Regulations

Purchased townhouses fall under strict local or municipal and zoning regulations, depending on the state in which they’re located.

These zoning laws and regulations include but are not limited to functional zoning, intensity zoning, form-based zoning, and incentive zoning.

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Townhouses located in areas with strict zoning laws and regulations tend to fetch higher prices than those that aren’t.

Therefore, it would help to consider the zoning laws and regulations of the area where you want to buy your townhouse before making the first down payment.

4. Increased Demand For Homeownership

While the world’s population has continued to grow at an astronomical rate, the number of homes around the world has remained the same.

Even though real estate companies are building new townhomes, there has been a considerable discrepancy between the supply and demand for homes.

This discrepancy has, in turn, increased the demand for townhomes worldwide, forcing real estate agents to increase townhomes’ prices.

5. High Home Ownership Costs

Buying a townhome exempts you from maintaining the exterior space of your house since the homeowners association takes over the work.

However, even if the homeowners association takes over the responsibilities of maintaining the exterior space of the house, you’re required to pay specific maintenance bills.

In addition, some townhouse communities require you to take care of all your exterior space maintenance services, such as snow removal and lawn care, among others.

Therefore, home maintenance costs could add up quickly if your townhome has ample private outdoor space.

These additional maintenance costs eventually add up to the cost of buying the home, making the townhome an expensive real estate to maintain in the long haul.

6. Low-Interest Rates

Low-Interest Rates

In the past years, the interest rates of mortgages and other home ownership financial programs have decreased as the government seeks ways to encourage homeownership.

Lowering these interest rates has, in turn, drastically reduced the cost of home financing over time, leading to many prospective homeowners opting to buy townhomes.

As a ripple effect, this has increased the demand for townhomes worldwide while negatively affecting their supply.

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With the increased demand for real estate properties, the prices of townhomes have continued to sour at astonishing speed.

7. Structural Features

Generally speaking, townhomes are houses that share a wall or two with neighboring real estate properties with a separate entrance, yard space, garage, and basement.

But, most townhouses come with other communal facilities shared among the community residents, such as gyms, tennis courts, swimming pools, clubhouses, and fitness centers.

These communal facilities are maintained and managed by the homeowners association on behalf of the townhome community.

These communal amenities enhance the residents’ lives and are valuable assets if you don’t mind sharing them with other members of the townhome community.

Nevertheless, these townhome amenities come at a cost since their price is included in the eventual price of the townhome, thus hiking the prices.

8. Increased Land Prices

Over time, the world’s population has continued to grow while the amount of land available to build homes has remained constant.

The population increase has, in turn, led to the scarcity of available land for constructing enough townhomes to beat the demand.

Due to this scarcity, land prices have continued to increase at exponential rates all over the globe, leading to a hike in townhomes prices.

9. Enhanced Security

Everybody yearns to bring up their family or live in a peaceful, tranquil space free from insecurity, and townhomes offer just that.

Townhome communities tend to be close-knit communities that know each other pretty well due to their proximity among themselves and communal living.

Hence, living in a townhouse community will help you to quickly expand your friends’ circle and scope if you love socializing and making new friends.

Additionally, townhouses give you a sense of community since you share common spaces and amenities with your neighbors.

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Due to this close-knit community living and sense of security, real estate agents sell townhomes at higher prices than other real estate properties.

10. Market Forces

Over the past years, the prices of real estate properties have continued to increase worldwide, leading to a steady increase in townhome prices.

Unfortunately, while the prices of homes have continued to grow, the typical household wage and income have remained stagnant.

For instance, according to a recent Pew Research Center Report, household wages and income increase by 2% to 3% annually in the United States of America.

This significant discrepancy has, in turn, led to many people being unable to actualize their dream of being homeowners.

But, it’s worth noting that various homeownership programs specifically tailored to help aspiring homeowners actualize their dream are available in the market.

11. Covid-19 Pandemic

Naturally, the prices of townhouses around the world are determined by the financial distress of the global economy.

This global pandemic has slowed the building of new townhomes worldwide, thus, increasing the demand for housing.

The increased demand for townhouses has consequently increased their prices, devastating the dreams of prospective homeowners.

To learn more, you can also read our posts on why mobile homes are so expensive, why land is so expensive, and why Texas houses are so cheap.


In retrospect, there is no one reason why townhomes are so expensive since various market forces determine their pricing.

Nevertheless, buying a home is always a good and one of the most crucial investment decisions due to the homeownership benefits.


  • Brandon Porter

    Brandon Porter is an architectural draftsman of 25 years and a self-proclaimed handyman. He loves renovating homes and making them his own, whether it's fixing up the plumbing or painting the walls.

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