It’s getting harder for homebuyers to find properties outside a homeowners association. About 44% of homes for sale last year had HOA fees attached to them, according to a recent report from Realtor.com. Meanwhile, a 2025 report from the Foundation for Community Association Research found 66% of newly completed homes are in community associations.
That isn’t necessarily a bad thing, according to David Diestel, CEO of FirstService Residential, a property management firm that oversees 9,000 communities in the U.S. and Canada.
“These are wonderful places,” Diestel says. Depending on the type of community, HOA fees may cover amenities, maintenance of common areas and future upgrades. “Developers are building what people want.”
That said, HOA fees can pose a challenge to affordability. They can be a hidden cost to homeownership, one that buyers don’t realize can grow uncapped year after year. And as HOA costs rise, they threaten to wipe out any savings buyers may see as a result of reduced mortgage rates.
Interest Rates Rebound, HOA Fees Rise
Rates for a 30-year mortgage averaged just above 7% in January 2025, according to data from Freddie Mac. At the start of March 2026, the average rate had dipped to about 6% before spiking again at the start of the Iran war.
Meanwhile, the median HOA fee increased to $135 per month last year, Realtor.com says. The median fee was $125 in 2024 and $108 in 2019. Those increases aren’t enough to wipe out the savings from reduced mortgage rates in early 2026, but not everyone has HOA fees that low. About 3 million homes paid more than $500 a month in 2024, according to estimates from the Census Bureau’s 2024 American Community Survey.
HOA fees can increase every year, and there is usually no limit on the size of those increases.
“People are getting payment shocks when they move in, and in three months, the assessment doubles or they get hit with a special assessment,” says H. Jack Miller, a strategic advisor for the real estate platform Real Estate Bees and president of Gelt Financial, a commercial and investment real estate lender in Boca Raton, Florida.
The problem is especially acute in Florida, where legislation to ensure the integrity of older condos was passed in the wake of the partial collapse of a 12-story building in Surfside, Florida, in 2021.
“Older condos now must have an engineer study, fix issues, (have their) books examined and have proper reserves,” writes Jeff Lichtenstein, CEO and broker with Echo Fine Properties in Palm Beach Gardens, Florida, in an email. “It’s good legislation … but this also threw an incredible amount of increases in HOA costs onto the consumer.”
In the Miami metro area, HOA fees make up more than a quarter of mortgage payments, Realtor.com finds. The median HOA fee there is $617 per month. Panama City, Naples and Cape Coral are other communities where HOA fees comprise approximately 20% of mortgage payments.
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Associations Squeezed by Insurance, Aging Facilities
It isn’t just Florida that has older buildings in need of updates.
“I’m seeing a lot of older buildings with deferred maintenance,” says Albert Babayan, a broker with JohnHart Real Estate in Glendale, California. That may be because communities are reluctant to raise fees for residents, but “The cost of the repairs is not going to go away.”
Maintenance for older buildings is only one issue facing community associations. Fees are also increasing due to climbing insurance premiums, particularly in coastal areas that are subject to extreme weather, according to Howard Jacobson, chief operating officer at Stronglast Builders.
“HOA directors also face intense pressure from fellow homeowners to keep HOA fees as low as possible, not only to ease financial stress on owners but also to avoid deterring potential homebuyers who dislike, of course, high HOA dues,” writes Jacobson in an email.
However, repairs can only be deferred for so long, and insurance increases can’t always be avoided. At that point, if a community hasn’t been collecting enough in HOA fees to maintain a healthy reserve, residents could find themselves facing shockingly high fee increases.
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HOAs: Saving Homeowners Maintenance Costs
While HOA fees may add to homeowner costs, Diestel says there is an upside. “It does help with affordability because there is a cost-sharing.”
Community association fees can pay for upkeep that homeowners may otherwise have to cover themselves. In communities of single-family homes, HOA fees may pay for private street maintenance, winter snowplowing in northern climates, landscaping and shared amenities such as pools and pickleball courts. In multifamily buildings, the HOA fee can also pay for roof and building repairs, common areas and parking spaces.
When you consider the rule of thumb that people should be saving 2% of their home’s value each year for maintenance, Diestel says HOA fees aren’t unreasonable and may, in fact, make homeownership more affordable. Rather than paying for amenities and maintenance themselves, homeowners pool their money with other community members to cover these costs.
Tips for Homebuyers Considering a HOA Property
Despite the added cost, HOAs are popular with many homebuyers. The key is to understand what you are getting for the cost and whether large fee increases could be coming in the future.
“As condo experts, we always strategically advise our buyers to steer clear from low HOA fees as they could potentially mean that the HOA may not have healthy reserves for repairs,” Babayan says.
Potential homebuyers should ask to see the bylaws and meeting minutes from HOA board meetings to understand how the association is run. They should also ask about the long-term plans for the community. Are major upgrades in the works? Is there a schedule for regular and periodic maintenance?
“A lot of the boards are kicking the can down the road,” according to Miller.
You don’t want to be surprised by large fee increases in the future. Reviewing all this information can help you gauge whether an HOA board is proactively addressing the community’s financial and structural health or avoiding making difficult decisions.
If a building has been deemed nonwarrantable by Fannie Mae and Freddie Mac, that could also be a red flag. A nonwarrantable condo is not eligible for government-backed loans, and it can receive that classification for the following reasons:
— The HOA doesn’t save at least 10% of dues in reserve.
— More than 15% of owners are more than 60 days behind in paying their assessment.
— More than half of units are rentals.
— More than 20% of all units have a single owner.
— The HOA has been sued.
Owners Should Plan for Annual Increases
Homebuyers concerned with affordability
should think about how HOA fees may increase over time as they consider whether a property is right for them. Diestel says he has seen increases of 3% to 15% in communities recently, and he thinks new homebuyers should expect at least inflationary increases each year.
“Homeowners are very excited when they see no increase,” Miller says, but that could simply mean that maintenance has been deferred and big jumps in annual costs are coming.
Properties in community associations are appealing for many reasons. They can come with nice amenities, reduced personal home maintenance costs and a built-in sense of community. However, understand the potential costs — both current and future — before making an offer.
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HOA Fees vs. Mortgage Rates: Which Is Actually Driving the 2026 Affordability Crisis? originally appeared on usnews.com