“A Shadow Mortgage”: How Rising HOA Fees Are Pushing More Americans Toward Foreclosure

When Jo Meleca-Voigt, 55, a disabled retired nationalist pedagogue bought a Rochester, New York townhouse successful 2021, the homeowners association's exterior-maintenance sum was portion of the appeal. They budgeted for a $235 monthly HOA fee. Five years in, that interest climbed much than 60%, to $385 a month, and 2 peculiar assessments successful 2023 added different $3,000 to rebuild reserves and repair aging roofs. As she told Bankrate's Linda Bell: "This is perfectly a shadiness mortgage. It's really worse than a mortgage. If you get a owe with a fixed rate, you cognize what you wage and you tin enactment astir it. [The HOA fee] is simply a wild-growing weed successful the plot that is our surviving expenses. It is unpredictable and we person nary recourse."

Her framing captures a nationalist shift. The median HOA interest tracked by Realtor.com present sits astatine $135 a month, up from $125 past twelvemonth and $108 successful 2019. Nearly 85% of townhomes and condos transportation an HOA; 33% of single-family homes do. In Miami-Fort Lauderdale-West Palm Beach, mean dues tally $617 a period against a median location terms adjacent $425,000, astir 27% of a emblematic owe payment. Joel Berner, elder Realtor.com economist calls it "a contention to the bottom": "It's thing that's a small spot much accepted than it was possibly 10, 20 years ago. As it becomes much common, it's benignant of a contention to the bottom."

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The Hidden Tax connected Purchasing Power

Lenders rotation HOA dues straight into debt-to-income ratios, truthful each dollar of fees shrinks what a purchaser tin suffice for. Using an mean 6.27% owe complaint arsenic of March 2026, Bankrate calculates that each $100 a period successful HOA dues erases astir $16,200 of home-purchasing power. At $700 a month, that's $113,400 gone earlier an connection is written, combined with Case-Shiller National Home Price Index astatine 335.1 successful May 2026, sitting successful the 90th percentile historically, the affordability mathematics turns hostile. Sales bespeak it: existing location income fell to a 4.09 cardinal annualized gait successful June 2026, sitting successful brushed territory.