Homeowners Face Increased Affordability Struggles Due to Rising HOA Fees

As the housing market landscape continues to evolve, homeowners are grappling with rising costs that further complicate their ability to afford homes. According to a recent report by Realtor.com®, the increasing Homeowners Association (HOA) fees are becoming a significant concern for many prospective homebuyers across the United States. In 2024, a considerable portion of homes listed for sale featured HOA fees, with 40.5% of listings carrying a non-zero fee—up from 39.2% the previous year. The median monthly fee for these listings climbed from $110 to $125, marking an increase that underscores the financial pressures homeowners face. Danielle Hale, the chief economist at Realtor.com®, explains the complexities surrounding homeownership today. "Purchasing a home is not just about the down payment and closing costs; buyers must also consider the ongoing obligations such as principal, interest, taxes, and insurance. With the added burden of elevated HOA fees, the financial landscape can become daunting for many," she remarked. The report emphasizes that particular types of properties, including condos, townhouses, and newly constructed homes that often boast extensive amenities, are more likely to incur HOA fees. Buyers should take into account the benefits these fees provide—such as maintenance, security, and community amenities—when budgeting for their future homes. The report notes that newly built homes specifically exhibit the highest likelihood of having associated HOA fees, with nearly 69.9% of newly constructed listings subject to these charges. In contrast, only 37.1% of existing homes incur these fees. Additionally, condos are significantly more likely to attract HOA dues, as evidenced by the findings that 83.8% of condo listings in 2024 included such expenses, compared to 33.6% for single-family homes. Areas characterized by a high concentration of new developments or popular vacation spots, such as beach or ski markets, are especially prone to higher HOA fees, placing an additional financial strain on buyers in these desirable locations. For instance, in Edwards, Colorado, 89.9% of homes listed for sale come with HOA dues averaging $525 per month, making it the metro area with the highest percentage of listings subject to these fees. Myrtle Beach, South Carolina, follows closely, where 84.8% of listings have HOA dues averaging $138. Conversely, buyers looking to minimize or avoid these fees can find relief in smaller markets where new constructions and condos are limited. Areas such as Anniston-Oxford, Alabama, report only 3.8% of listings with HOA fees, and the median fee amounts to a mere $29. Other locations, including Elizabethtown, Kentucky, and Jonesboro, Arkansas, also offer low percentages of listings subject to HOA fees, providing options for budget-conscious homebuyers. The analysis concludes that understanding the implications of HOA fees is crucial for prospective buyers in today's challenging housing market. Realtors and buyers alike must carefully assess the benefits and potential drawbacks of homes with HOA obligations to navigate affordability while fulfilling homeownership aspirations. For the full report and more information, visit Realtor.com’s research page. Though the challenges are evident, informed decision-making can lead homeowners closer to achieving their dream of homeownership, amid rising costs and changing market conditions.