The hidden housing cost: How HOAs are becoming a ‘shadow mortgage’

Homeowners association (HOA) fees are increasingly acting like a second mortgage, straining budgets and forcing some retirees into financial hardship. Jo Meleca-Voigt, a 55-year-old disabled and retired public educator in Rochester, New York, saw her HOA dues jump over 60% in five years, from $235 to $385 monthly. Two special assessments in 2023 totaling $3,000 further drained her savings, leaving her struggling to cover unexpected costs. The median HOA fee in the U.S. has risen to $135 per month, up from $125 last year and $108 in 2019, according to Realtor.com. Nearly 85% of townhomes and condos now have HOAs, while 33% of single-family homes do. In the Miami-Fort Lauderdale-West Palm Beach area, average HOA fees reach $617 monthly, nearly 27% of a typical mortgage payment for a median home costing $425,000. Special assessments can be even more burdensome, sometimes totaling tens of thousands of dollars. In downtown San Diego, high-rise buildings have imposed assessments of $80,000 per unit for major repairs like plumbing overhauls. Unlike mortgages, HOA fees cannot be refinanced or renegotiated, leaving homeowners with no escape even after paying off their loans. Economists warn that rising HOA costs are pricing homeowners out of their own properties. Joel Berner, senior economist at Realtor.com, notes that buyers are becoming more reluctant to purchase homes with high HOA fees, creating a ripple effect in the housing market. The trend reflects broader inflation and labor/material cost increases, making HOA fees an increasingly inescapable financial burden.