Which will turn around more equity after 10 years?

For buyers who have been priced out of single-family homes, condos and townhouses often look like the next best bet, and it’s easy to see why: Both promise lower price tags, lighter maintenance, and an easier entry point into ownership.

But how those advantages translate into long-term wealth can look very different depending on what and where you buy.

The last decade has been a remarkable one for homeowners, with values climbing across nearly every corner of the market. Yet the race between condos and townhouses has been closer than many realize. Each has produced substantial equity gains, though subtle differences in their performance hint at deeper divides shaping today’s housing market.

Those divides are growing sharper as affordability pressures mount. In some regions, condos have surged ahead, fueled by urban density and city demand. In others, townhouses have captured the edge, riding the scarcity of single-family homes to deliver returns that feel almost indistinguishable from detached housing.

For buyers weighing their next move, the question isn’t simply condo versus townhouse—it’s how local market forces will shape the equity you build over the next decade.

Neck-and-neck appreciation nationally

To gauge where condos and townhomes may head over the next decade, it helps to look back at the last one. 

Single-family homes appreciated 87.3% from 2014 to 2024, according to Realtor.com® senior economic research analyst Hannah Jones. Townhomes nearly matched that pace at 86.5%, while condos trailed only slightly at 82.7%.

That modest gap reflects the different roles condos and townhomes play in the housing market. 

“Single-family homes are still the most popular type of homes purchased in the U.S. However, condos do appeal to buyers who want a smaller square footage and less upkeep,” explains Jessica Lautz, the National Association of Realtors® deputy chief economist and vice president of research. “Condos are also significantly more affordable than single-family homes, which allows buyers who are downsizing or those just starting into homeownership to embrace condos.”

Still, the numbers show townhomes have been edging closer to single-family performance. 

“Over the last decade, condos and townhomes appreciated almost in lockstep, but townhomes have pulled slightly ahead recently as buyers chase ‘house-like’ living without the single-family price tag,” says Jones.

While both property types have delivered strikingly similar returns from a national lens, as in all things real estate, the real gains come down to location, location, location.

Regional trends: The real divergence

In the Midwest, condo prices rose 78.3% over the last decade, outpacing the 70.7% growth of townhomes. The South followed a similar pattern, with condos climbing 66.7% compared with just 53.1% for townhomes. 

The dynamic flips in higher-cost regions. In the Northeast, townhomes surged 80.5%, far ahead of the 58.6% gain for condos. And in the West, townhomes appreciated 83.8%, edging past condos at 78.9%.

Affordability explains much of the split, says Jones. 

“In the more affordable Midwest and South, condos have gained ground faster than townhomes. In higher-cost regions like the Northeast and West, townhomes have appreciated more quickly,” she explains.

In lower-cost markets, condos benefit from their clustering in downtown areas and their appeal to buyers chasing city living. But in expensive, supply-constrained metros, the premium shifts toward townhomes. 

“Townhomes are commanding a growing premium as buyers seek a house-like property when single-family homes are out of reach. In more affordable markets, condos—often concentrated in dense city centers—have captured stronger growth as buyers compete for limited housing options,” she adds.

The case for townhouses

“Townhomes look set for steadier growth,” says Jones. Part of that is because of what you get when you buy one.

When you purchase a townhouse, you own both the structure and the parcel of land it sits on. That land ownership gives you more control, typically fewer restrictions, and it can be a stronger driver of long-term appreciation. 

“Generally townhouses have strong appreciation potential because the land itself appreciates in a more reliable way,” explains Aman Sharma, a real estate agent at SERHANT.

Eric Hughes, a real estate investor and coach with Rental Income Advisors, agrees. “The price growth of townhomes will track extremely closely with the price growth of single-family homes in general,” he says.

That connection to single-family homes is key. The “single-family feel” broadens their appeal to a wider range of buyers—families, downsizers, and even first-timers looking to get their foot in the door.

They also tend to come with lower HOA fees than condos. That not only frees up more buying power for the mortgage itself, but it also makes resale easier since future buyers are less likely to be put off by steep monthly dues or looming assessments.

But Jones warns that this investment isn’t free of potential headwinds. In markets where single-family inventory is expanding and prices are softening, townhome demand may take a hit as more buyers opt for detached homes instead.

The case for condos

“In tight urban markets, condos can still shine as buyers get creative,” says Jones.

Even though the appreciation rate of condos has lagged behind townhomes and single-family homes nationally over the last decade, they can still deliver strong returns in the right conditions.

“In big urban markets, condos are often the most desirable type of urban residence, and can appreciate strongly,” says Hughes. That means that in places like Miami Beach, New York, and San Francisco—where land is scarce and demand for city living is strong—condos dominate. 

“There are certain parts of our city where highly amenitized condo high-rises perform better than townhouses from an investment standpoint,” says Miltiadis Kastanis, executive director of sales at Compass, based in Miami.

Lifestyle amenities are another draw. Concierge service, pools, gyms, and other perks make condos especially attractive to luxury buyers or second-home seekers who prioritize convenience. For full-time residents, those amenities can also translate into higher perceived value when it’s time to sell.

But again, Jones stresses that there is greater potential for some bumps in the road for condos, ranging from rising ownership costs to competition from single-family homes and townhouses.

Hidden costs and risks that eat into equity

The experts we spoke to stress that your return on investment isn’t just about appreciation and loan paydown. The hidden costs of homeownership can chip away at returns. However, it’s worth noting that even single-family homes can fall prey to these same traps. 

“While single-family homes may not have an HOA fee, some communities do even for single-family homes,” says Lautz. “Maintenance can be more expensive when a homebuyer must account for costly items such as roofs, which a condo owner is unlikely to be responsible for.”

While it’s true that owners of single-family homes must shoulder all their own maintenance costs, condo owners risk getting hit with special assessments that may cover repairs or upgrades to facilities they don’t use, or work that should have been done properly the first time around.

Rick Bannon, global real estate adviser at One Sotheby’s International Realty, points to a condo in Miami where residents were hit with a $1 million special assessment just to bring the building up to safety standards.

That’s why Joe Luciano, broker at Re/Max Bentley’s, takes special care when helping his clients through a condo purchase.

“When advising clients on a condo purchase, we always want to get the meeting minutes to see if there’s any chatter around potential projects coming up and then also the financials to see if they have the appropriate amount in reserve funds to cover any surprises,” he says.

Outside of special assessments, Luciano says monthly HOA fees can take a big bite out of a homeowner’s return on investment.

“When looking at the two as investments side by side over 10 years, the appreciation could be similar, but paying an extra $300 to $500 a month is a sunk cost of $36,000 to $60,000 that didn’t go toward your mortgage principal,” explains Luciano. 

At the extreme end, he points to luxury Boston high-rises with $2,000-plus monthly HOA fees that have seen stagnant appreciation in recent years.

So which is a better investment after 10 years?

If the last 10 years prove anything, it’s that condos and townhouses will both continue to deliver strong returns—just not always for the same reasons, or in the same places.

Townhomes have shown they can reliably shadow the trajectory of single-family homes, powered by land value and a “house-like” appeal that buyers continue to prize. Condos, by contrast, thrive where affordability and density drive demand, making them especially potent in urban cores and lower-cost regions where buyers are squeezed out of detached homes.

The next decade may sharpen these divides. As affordability pressures deepen, first-time buyers could lean more heavily into condos, reviving demand in downtowns that have seen uneven recoveries since the pandemic. At the same time, zoning reforms and the ongoing shortage of single-family homes could keep pushing buyers toward townhouses as the closest substitute for a detached home. Policy choices—from property tax incentives to how cities handle condo reserve requirements after recent safety crises—will also influence which type of property captures the bigger share of appreciation.

For investors, the lesson isn’t to pick one winner and walk away. It’s to understand how local affordability, supply constraints, and regulation interact to tilt the playing field.