When mortgage interest rates were below 3 percent, first-time home buyers skipped the intermediate purchase of a condo or town home and jumped right into a single-family home. Three- and four-bedroom homes are the sweet spot for buyers looking at a home for the long-term. The combination of higher interest rates, soaring home prices, inflation, and lagging wage increases are having a big impact on the affordability of single-family homes. The result is that some buyers are having to start smaller. Either way, purchasing a smaller home over renting is still the best path to home ownership growth.