Townhouses offer convenience and amenities that appeal to a range of homebuyers. They’re also growing in popularity, with new townhouse construction up more than 28% from 2020 to 2021. Construction costs also increased during the same time period.
Whether you’re building an investment property or your own new home, determining the project cost is essential before breaking ground. The cost to build townhouses depends on the size, location, number of units, onsite amenities, and the style of the building.
Table of Contents
Key Points
• Building a townhouse costs between $111 and $125 per square foot on average.
• Costs vary based on type, size, location, and additional features like garages or basements.
• Economies of scale can reduce costs when building multiple units.
• Location affects construction costs due to labor rates and material availability.
• Adding features like basements or pools increases overall construction expenses.
What Is a Townhouse?
A townhouse, also called a townhome, is a type of single-family home that has two or more floors and a shared wall with at least one other home. Compared to different home types, like duplexes and triplexes, each townhouse is individually owned and has its own entrance. Given the high-density design, townhouses tend to be more common in urban and suburban communities.
Townhouses often have their own yard or garage, but may share other communal amenities, such as a pool or tennis court, with neighboring townhouses. These shared facilities are typically governed by a homeowner’s association (HOA), which townhouse owners pay fees to for managing amenities and providing services like landscaping and snow removal.
If choosing between a condo or townhouse, another distinction is that townhomes usually have more autonomy in customizing the exterior of their home and outdoor living space, and more responsibility for that space as well.
First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.
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What Determines the Cost of Building a Townhouse?
The cost to build townhomes depends on a variety of factors. The type of townhouse, size, number of units, location, and additions like garages and basements all contribute to the total construction cost.
Here’s what to consider when estimating how much to build a townhouse.
Type of Townhouse
There are different types of townhouse layouts and configurations, including traditional, stacked, and urban.
• Traditional: Generally organized in a row with two floors of living space, a basement, and garage.
• Stacked: Refers to townhouse units stacked in a multi-floor building, which typically have their own entrances.
• Urban: Similar to traditional townhomes, but often have more modern and spacious floor plans and higher prices.
Another key decision when purchasing a new construction home or townhome is whether to go with a modular or stick-built design. The components of a modular townhome are manufactured off-site, saving time and labor.
Stick-built townhouses are constructed on-site using a wooden frame and finished with a brick or vinyl exterior. This type of construction allows for greater customization, but generally comes at a higher cost than modular townhomes.
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Square Footage
The cost to build a townhouse is impacted by the size, which is measured in square feet.
Townhomes cost between $111 to $125 per square foot on average. Because townhouses share walls and occupy smaller lots, they’re often more affordable than detached single-family new construction, which breaks down to an average of $150 per square foot.
Using the square footage to estimate total townhome cost is a fairly straightforward calculation. For instance, builders can expect to pay between $222,000 and $250,000 to erect a 2,000-square-foot townhouse based on the average range. Bear in mind that does not include the cost of the building site.
With these estimates, you can compare mortgage rates and determine what financing you qualify for.
Number of Rooms
The interior layout, including the number and types of rooms, is a key determining cost factor.
Not all rooms are created equal though, with kitchens and bathrooms being the most expensive due to appliances, tiling, plumbing, and more complex electrical work. The living spaces and bedrooms are generally simpler and cheaper to build.
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Number of Units
By definition, townhouses are built in groups. Leveraging economies of scale to build multiple units or a complex could reduce the cost per unit. Keeping the design and floor plan consistent across units can also lower the price.
So, how much does it cost to build a townhouse complex? That depends on the extent of amenities included, as well as the number of units.
Location
Location, location, location. Where you choose to build a townhouse will impact the cost of construction and its value once completed.
The cost of labor varies significantly between regions. Paying builders and contractors typically accounts for 40% of new home construction expenditures. The location of the townhouse also matters in terms of costs related to accessing the site and sourcing materials.
Additions
Wondering how much to build townhomes with attractive amenities? Here’s what you can expect to pay for common townhome add-ons.
• Basement: Building a basement foundation costs between $24,000 and $44,500 on average.
• Driveway: The materials and installation costs for a new driveway range from $2 to $15 per square foot depending on the material used.
• Fencing: More affordable fence materials like wood, vinyl, and composite range from $10 to $45 per linear foot.
• Garage: Cost varies by size, with one-car garages ranging from $10,500 to $27,000 and double garages costing between $14,500 and $40,300.
• Pool: Expect to pay between $28,000 and $66,500 for an in-ground pool, with vinyl and fiber-glass lining typically costing less than concrete.
• Shed: Adding a storage shed ranges from $300 to $15,000, with pre-fabricated options usually costing less than custom builds.
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Construction Cost for Building a Townhouse
Construction costs are often the deciding factor when thinking of buying or building a house. Townhouses are generally less expensive to build per unit than a detached single-family home.
In addition to the factors discussed above, townhouse construction involves a range of pre-construction costs, like purchasing land, building permits, and architectural or design fees. The materials and labor usually account for the majority of the expenses to build a townhouse.
Townhouses can be designed as starter homes or luxury properties, and project budgets can be structured according to the target market and expected return on investment. Still wading into the waters of homebuying? Consult a Home Loan Help Center for useful tips and guides to master the basics.
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The Takeaway
How much does it cost to build a townhouse? In short, it depends on the type of townhouse, size, number of units, location, and added amenities. But you can estimate roughly $111 to $125 per square foot or $225,000+ for a 2,000 square-foot abode, not including land cost.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
How many townhouses can fit on an acre?
The number of townhomes that can fit on an acre will depend on what’s permitted by local zoning, as well as space allocated for landscaping, parking, and other amenities. However, an acre can accommodate around 20 two- or three-story townhomes.
How much are utilities in a townhouse?
Utility costs vary by location, unit size, personal energy use, and equipment used for heating and cooling. Due to their smaller footprint, townhomes typically have lower utility bills than single-family homes.
Should I buy a townhouse or single-family home?
There are pros and cons with either type of home. Townhomes may require less maintenance and include extra amenities, while single-family homes can offer more space and discretion in how you design and decorate your home’s exterior.
What are the disadvantages of living in a townhouse?
Living in a townhouse can mean less privacy from your neighbors and noise from shared walls.
Photo credit: iStock/vkyryl
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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