According to the National Association of Realtors (NAR), in 2025 the median age of a first-time home buyer in the United States was 40.
A lack of construction during the Great Recession created a housing shortage, and historically low interest rates drove values up, pricing many first-time buyers out of the market.
Of course, I may not have the most objective point of view, but I can’t figure out why the media doesn’t talk about duplexes as a more affordable alternative for first-time buyers. Home builders would be smart to add them to their repertoire too.
The fact is, duplexes are a more affordable alternative for owner-occupants than a comparable single-family home. Last year, the median home price for a South Minneapolis single-family home with 3 bedrooms and 1 bathroom was $353,300.With a 5% down payment ($17,665) and an interest rate of 7.25% (principal and interest $2290.02/month), annual property taxes of $ 5,246, an insurance premium of $2600, and setting aside $200 per month for repairs and $100 for trash, water, and sewer, a first-time home buyer would have an estimated monthly payment of $3144.76.
South Minneapolis duplexes with at least one 3-bedroom unit had a median price of $495,000 in 2025. With a 5% down payment ($24,750) and interest rate of 7.25%, (monthly principal and interest $3207.93), annual property taxes of $7046, insurance of $3400, trash, water and sewer of $2400 and setting aside $400 per month for repairs, the monthly total is $4678. That’s before the buyer collects $2000 in rent from the other 3-bedroom unit, which reduces their portion of the monthly payment to $2678.
That means a first-time home buyer saves $466 per month by buying a duplex instead of a house!
Both home buyers and duplex owner-occupants also receive the benefit of a mortgage interest deduction. Only the duplex buyer, however, is also able to take advantage of depreciation on the rented unit, as well as write off any improvements they make to it.
Of course, all of the above is based on a hypothetical duplex and equally hypothetical house. The savings, on the other hand, are very real. Whether you’re a parent with adult children struggling to qualify to buy a house, or a first-time buyer interested in exploring your options, give me a call. I’d be happy to show you how you can start down the path of homeownership and building long-term wealth.