The Hidden HOA Burden: How Homeowners Association Fees Are Quietly Driving Up Housing Costs

While our previous analysis showed how rental costs have spiraled over two decades, homeowners aren’t immune to escalating housing expenses—they’re just facing them through different, often hidden channels like rapidly rising HOA fees. Beyond the headlines about mortgage rates and home prices, a quieter force is steadily increasing the cost of homeownership across America: Homeowners Association (HOA) and condominium fees. These often-overlooked monthly expenses are becoming a significant financial burden for nearly a quarter of American homeowners, adding hundreds of dollars to monthly housing costs.

The Growing HOA Landscape

According to new data from the U.S. Census Bureau’s 2024 American Community Survey, nearly 25% of homeowners now pay monthly HOA or condominium fees—a clear indication of how prevalent these communities have become in modern housing development.

The numbers are eye-opening. The median monthly HOA or condo fee nationwide reached $135 in 2024, but this figure varies dramatically by location. New York leads the nation with a staggering median monthly fee of $739, while some states see fees well below the national average.

Where HOAs Dominate the Market

Three states stand out for having the highest percentage of homeowners paying these fees:

This concentration isn’t coincidental. These states have seen massive population growth and new construction over the past two decades, with developers increasingly relying on HOA structures to manage amenities, maintenance, and community standards in new developments.

The Real Impact on Housing Affordability

While $135 per month might seem manageable, HOA fees represent a permanent, non-negotiable monthly expense that can’t be refinanced or reduced through improved credit scores. For homeowners already stretched thin by rising mortgage costs and property taxes, these fees can push monthly housing expenses beyond affordable limits.

Consider the cumulative effect: a homeowner with a $2,035 median monthly mortgage payment (the 2024 national average) who also pays a $135 HOA fee is looking at $2,170 in basic housing costs before utilities, maintenance, or other expenses.

Behind-the-Scenes Cost Drivers

Real estate experts point to several factors driving HOA fee increases:

Extreme Weather and Climate Change

As severe weather events become more frequent and costly, HOAs face mounting expenses for storm damage repairs, updated building codes, and enhanced insurance coverage. These costs inevitably get passed through to homeowners via increased monthly fees.

Rising Service Costs

From landscaping and security to pool maintenance and common area utilities, the services that HOAs provide have seen significant cost inflation. Labor shortages in many service industries have further pushed these expenses upward.

Aging Infrastructure

Many HOA communities built during the housing boom of the early 2000s are now facing major infrastructure replacement costs—roofs, HVAC systems, roads, and recreational facilities that are reaching the end of their useful lives.

The Budget Surprise for New Homeowners

One of the most challenging aspects of HOA fees is that they often catch first-time homebuyers off guard. While mortgage lenders factor these fees into debt-to-income calculations, many buyers focus primarily on the mortgage payment and overlook the permanence and potential for increases in HOA fees.

“It’s not always clear to prospective homebuyers to budget for these costs since they sit on top of the basic principal and interest payments on a home, but these costs are rising and are a significant portion of what homeowners pay every month,” notes Joel Berner, senior economist at Realtor.com.

Even Mortgage-Free Owners Feel the Pinch

The impact of rising HOA fees extends beyond traditional homeowners with mortgages. Even the growing number of homeowners who own their properties free and clear—about 40% of all homeowners as of 2024—must contend with these escalating monthly fees.

For these homeowners, who might have downsized or paid off their mortgages in retirement, rising HOA fees can significantly impact fixed incomes and long-term financial planning.

Looking Ahead: What This Means for Housing

As new construction continues to favor HOA-managed communities, especially in high-growth states, these fees are likely to become an even more significant factor in overall housing affordability. Prospective homebuyers increasingly need to factor not just the purchase price and mortgage costs, but also the long-term trajectory of HOA fees when making housing decisions.

For current homeowners in HOA communities, staying engaged in association governance and understanding reserve funding can help ensure fees remain reasonable while maintaining property values and community standards.

The rise in HOA fees represents more than just another line item in the housing budget—it reflects the changing nature of American homeownership and the growing complexity of housing costs that extend far beyond the traditional mortgage payment.

To read more about this topic, visit Homeownership Costs Have Jumped 26% in 5 Years, Census Says.