Key Takeaways
A sharp increase in homeowners association fees is adding another layer of financial pressure on U.S. homeowners, with median condo fees climbing 29 percent since 2019 to $420 a month. The surge exacerbates an already challenging housing market defined by high mortgage rates and property taxes.
"All these things are pricing some people out of homeownership,” Joel Berner, a senior economist at Realtor.com, told The Wall Street Journal.
The analysis by Realtor.com shows that alongside the jump in condo fees, median HOA fees for single-family homes have increased 26 percent to $63 over the same period. In 2024, about 21.6 million U.S. households paid such fees, with roughly three million of those paying more than $500 per month.
While mortgage rates may eventually fall, the underlying costs driving HOA fees higher—such as property insurance, labor, and materials—are expected to continue rising. This trend threatens to further strain household budgets and could suppress demand in a condo market already described as the weakest in a decade.
The escalating fees are not just a barrier for potential buyers but also a growing burden for existing homeowners. In Walnut Creek, California, homeowner Donald DeFesi has seen his monthly condo association fees more than double since 2015 to $1,500. He reported that his combined payments for association fees, condo insurance, and property taxes now exceed the cost of his mortgage principal and interest.
This phenomenon is widespread, with rising costs for building infrastructure and neighborhood amenities passed directly to residents. The primary drivers are significant hikes in the cost of property insurance, labor, and materials. For many, these fee increases are unexpected and unsustainable.
The impact is particularly acute in the condominium market. Rebecca Lotsoff, a prospective buyer in Chicago, told the Journal her search has been stymied by her refusal to pay a monthly fee above $500, a budget that severely limits her options in a competitive market.
In response, some homeowners associations are considering service cutbacks to mitigate the fee increases. Cindy Kielty, an HOA board president in St. Charles, Missouri, noted her association might reduce services like watering grass. Her own fees have climbed from $125 a month in 2009 to $350. “People are just going to have to change their expectations as to what’s going to be covered,” she said. “They have a choice: Do more yourself or pay more money to the HOA.”
This article is for informational purposes only and does not constitute investment advice.
