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How to choose between a single-family vs. multifamily home

Yahoo Personal Finance· Getty Images
Updated 5 min read

When you think of purchasing a house, you’re likely thinking about buying a freestanding single-family home. According to the National Association of Realtors, this is the most common type of home purchase in America, with 79% of buyers purchasing detached single-family homes in 2023. But just because single-family properties are the most popular type of house doesn’t make it the only choice. Many home buyers can benefit from a multifamily home.

Here’s what you need to know about the differences between single-family versus multifamily homes.

Learn more: Is it a good time to buy a house?

In this article:

As the name suggests, single-family homes are houses built specifically for one family to live in. While most single-family homes are detached, some attached housing (such as townhouses) may be considered single-family. Specifically, the U.S. Census Bureau states that single-family homes must meet the following criteria:

  • Detached or separated from other homes by a ground-to-roof wall

  • Separate heating/air conditioning systems

  • Individual meters for public utilities

  • No units above or below

  • No shared spaces, such as a garage, attic, or basement

As long as a house meets these characteristics, it is considered a single-family dwelling. That means fully detached homes, semi-detached homes, rowhouses, and townhomes may all be considered single-family.

Multifamily homes are dwellings built specifically to house more than one family unit. According to the Library of Congress, these kinds of homes may also be referred to as multi-dwelling units or MDUs, and they include any places where multiple separate units are contained within the same building or complex of buildings. Multifamily properties generally have shared space or utilities.

This means the following types of homes are considered multifamily:

  • Duplexes/triplexes: This type of housing is often found in neighborhoods with detached single-family properties. It’s relatively common for a homeowner to purchase a duplex to live in one unit while using the second one as rental income.

  • Apartments: Apartments are units inside apartment buildings, generally owned by a landlord and rented out to residents.

  • Condominiums: Condos are sold by unit to individual home buyers, but purchasing a condo generally also includes shared ownership of common areas and amenities, such as a fitness center or outdoor maintenance.

  • Cooperatives: Co-ops are similar to condos, but instead of buying the unit you live in, you’re buying a share of the corporation that owns the property.

  • Mixed-use developments: Buildings that combine residential space with commercial, retail, or cultural space allow residents to live alongside businesses, shops, or other public spaces.

  • Age-restricted housing: This kind of housing is usually restricted to residents aged 55 or older. Geared toward building social engagement, age-restricted housing often includes lifestyle amenities such as fitness facilities and classes, social clubs, and activity directors.

Dig deeper: Condo vs. house — Which should you buy?

There are several reasons why a single-family home may be the right choice for you. Some of the major benefits of a single-family home include:

  • Privacy: Single-family houses generally offer more space between neighbors than multifamily homes. Most single-family homes also have more living space than multifamily ones, which offers more privacy and space within the home too.

  • Equity growth: Traditionally, single-family homes appreciate in value more than units purchased in multifamily properties.

  • Opportunity for customization: If you have a single-family home, you generally do not have to get approval from anyone to personalize your home, provided you meet local code requirements and obey rules set by your homeowners’ association, should you have one.

A single-family house is not necessarily the right choice for every home buyer. There are several benefits to buying a multifamily home that may make it a better option for you. These include:

  • Lower initial costs: In most cases, single-family homes cost more than units in multifamily properties. For example, the National Association of Realtors found that the median sales price for a single-family home was $397,200 in March 2024, while the median price for a condo was roughly $60,000 less at $337,900. This means your down payment and monthly mortgage payments could be smaller.

  • Less maintenance and repair: Many multifamily properties often include maintenance as part of their amenities. This could include everything from snow removal to pest control to repairing leaky faucets.

  • Access to amenities: Your multifamily building unit could give you access to shared amenities like fitness centers, pools, or entertainment centers.

Dig deeper: How much house can I afford?

Deciding between a single-family and a multifamily home will depend a great deal on what you need from your home. Home buyers who want privacy, equity growth, and the ability to personalize their houses may find a single-family home is a better option. In contrast, those who want lower initial costs, less responsibility for maintenance, and access to amenities may prefer a unit in a multifamily dwelling.

Historically, single-family homes appreciate faster than units in multifamily properties. Since 2012, the average single-family home has appreciated by 69%, compared to a 27% appreciation for condos. This more rapid appreciation is partially due to the higher demand for single-family houses.

There are several rules of thumb for determining the minimum square footage for a family. Home buyers are most commonly advised to multiply the number of residents by a certain number of square feet, typically around 600. So, 600 x 4 = 2,400 sq. feet. Alternatively, some suggest that families should aim for every child to have their own bedroom, so a family of four would need a minimum of three bedrooms (one for each child and one for the parents to share). Of course, if this isn’t financially feasible, you may choose to have kids share a room or make do with a smaller house.

The right home will allow each family member some privacy while also encouraging togetherness. The space you need can depend greatly on your family.

This article was edited by Laura Grace Tarpley