Home buyers often focus on home prices and mortgage rates when considering affordability. But for millions of homeowners, another housing cost – homeowner association (HOA) fees – is slowly rising and quietly reshaping the calculus.
Once considered a small upkeep fee, HOA dues are increasingly functioning like a shadow mortgage. This mandatory and ongoing monthly payment can increase unexpectedly and in extreme cases can even put your home at risk of foreclosure.
Joe Meleka Voigt, 55, a disabled and retired public educator, worries about that possibility.
In 2021, Meleka Vogt and his wife Christine purchased a townhouse in Rochester, New York. The home’s accessibility features and the HOA, which handles exterior maintenance, attracted them. The couple, who live on a fixed income, budgeted for a $235 monthly HOA fee.
But in five years, membership fees have jumped more than 60% to $385 a month. In addition, two special assessments totaling $3,000 were levied in 2023 for rebuilding the HOA reserve fund and repairing the community’s aging roof. Meleka-Voigt and his wife had to dip into their savings to cover the unexpected bill, not an easy move when every penny counts.
“This is completely shadow mortgage lending,” says Meleka Vogt. “In fact, it’s worse than a mortgage. You can avoid it by taking out a fixed-rate mortgage because you know what you’re going to pay.”
It (HOA fees) is a weed that grows in our garden and it is our living expenses. It is unpredictable and we have no recourse.
—Joe Meleka-Vogt
homeowner
HOAs can provide real benefits by managing residential communities, helping maintain common spaces, and providing amenities like pools and gyms. But there are also trade-offs. The median HOA fee is $135 per month, up from $125 last year and $108 in 2019, according to Realtor.com. This increase is due to an increase in the number of properties with HOAs as well. Almost 85% of townhomes and condos have an HOA, and 33% of single-family homes have an HOA.
“It’s starting to become more accepted than it was 10 or 20 years ago, when you paid monthly HOA dues,” said Joel Berner, senior economist at Realtor.com. “As it becomes more common, it’s kind of a race to the bottom where one district can say, well, this district across the street is charging $200 a month in HOA fees. So we can probably raise our prices a little bit, too.”
Housing costs that never go down
As inflation continues to rise and the cost of labor and materials continues to rise, HOA fees have also increased and now account for a significant portion of overall housing costs.
For example, in the Miami-Fort Lauderdale-West Palm Beach area, the average HOA fee for a home with a median price of about $425,000 is $617 per month, according to Realtor.com. This is approximately 27% of the typical mortgage payment amount.
“These (increased costs) create the fact that they can’t live in the homes they bought,” Varner said.
In addition to monthly fees, special reviews can be even more shocking. Recurring fees are used to cover major repairs and expenses that cannot be covered by the HOA’s budget or reserves. Depending on the type of property and location, a special assessment can be equivalent to a small mortgage.
“In downtown San Diego, we’ve seen several high-rise buildings receive special appraisals in the tens of thousands of dollars,” said Kimberly Schmidt, team leader at Kimberly Schmidt & Associates with Compass in San Diego, California. “For example, you have to redo all the plumbing in the building, and each unit in that building costs $80,000. That feels like a shadow mortgage. We’re not talking about $50 or $100.”
Even after you pay off your mortgage, HOA fees continue to weigh on your finances. Unlike a mortgage, it cannot be refinanced, renegotiated, or converted into equity.
“Not only are these homeowners struggling to keep up with their (HOA) payments and keeping the lights on in their homes, but when they try to sell because they can’t afford it anymore, they’re running into buyers who are even more reluctant to buy,” Varner says. “There’s just a lot of friction going on in the market.”
HOA reduces purchasing power
HOA dues increases can impact your purchasing power differently depending on your position in the housing market. For current homeowners like Meleka Vogt, rising dues increases the overall cost of living.
“When I sat down and thought about how much it would cost to live here, I realized that HOA fees could go up,” she says. “But I didn’t expect it to go up more than 50%.”
Experts say buyers should expect such price increases. “Homebuyers should always expect their HOA fees to increase over their tenure as an owner,” Schmidt says. “If the HOA did not adequately fund the reserve account, the result could be deferred maintenance of the community itself, increased dues, or special assessments given to homeowners.”
For buyers who plan to purchase a home with an HOA, the impact starts even earlier. Lenders factor HOA costs into their debt-to-income calculations, so HOA dues reduce purchasing power before someone even gets the keys.
“HOA fees can limit what a community can buy, forcing buyers to look elsewhere or find less expensive housing within the community,” Schmidt says. “Lower prices often result in smaller homes, fewer upgrades, or less desirable locations.”
Mortgage equivalent to increased HOA fees
As of the third week of March, mortgage interest rates averaged 6.27%, according to Bankrate lender averages. According to Bankrate’s Affordable Home Calculator, every $100 in monthly HOA dues removes approximately $16,000 in purchasing power, acting like a silent mortgage that limits the homes you can buy.
| Monthly HOA fee | lost purchasing power |
| 100 dollars | $16,200 |
| 200 dollars | $32,400 |
| 300 dollars | $48,600 |
| 400 dollars | $64,800 |
| 500 dollars | $81,000 |
| 600 dollars | $97,200 |
| 700 dollars | $113,400 |
HOA fees can affect equity and home value
If you miss a mortgage payment, fees, interest, and sometimes legal costs increase, increasing your balance and reducing your home equity, which is the value of your home minus the amount you owe. Unpaid HOA dues can eat away at your assets, with late fees, interest, and attorney fees.
Paying off your mortgage typically increases your equity. But even if the home’s value doesn’t increase faster than the remaining balance and you need to sell, you’ll still have to settle the HOA debt, which will jeopardize your rights to the home, explains Ashley Morgan, attorney, owner and founder of the Virginia-based law firm Ashley F. Morgan Law.
“By making these HOA fees increase linearly every year, you’re reducing the value of your property, which is the equity in your home that you bought and really want to maintain its value,” Barner says. “2022 is not a time when home values are going to go through the roof, so these little pieces on the edge can make a big difference.”
Still, HOA fees aren’t always negative. A properly managed association will use your dues to fund repairs and maintenance, or to rebuild reserves. All this can make real estate more attractive and marketable.
“The value of what our community is like increases the value of our homes,” Meleka-Vogt acknowledges. “People who come to our home comment that it’s a really nice little community. There’s value that an HOA brings to those who have the financial ability to handle the growth. That’s very attractive.”
If you don’t pay, you could lose your home.
Living in an HOA community means agreeing to abide by its rules and regulations, which are legally binding and part of the property’s written record. Just like a mortgage, HOA dues are attached to your home. Debts don’t just go away even if you don’t pay them.
“Any debtor can file a lien against a property,” says Brian Fox, chief revenue officer at Venuetech, a Southern California-based real estate data solutions company. If payments are significantly delayed, state law will determine when the HOA can file a lien. “They’re doing it to protect the money they owe.”
A lien is a legal claim that secures a debt against real property. Simply put, this means you can’t sell or refinance your home until you pay off the money you owe. The number of HOA liens is increasing.
HOA liens will total 284,933 in 2025, an 8.6% increase from 262,446 in 2024, with Florida, Texas and California leading the way, according to Benutech data.
If the lien is not resolved, in some cases the HOA may begin foreclosure proceedings to collect unpaid dues, even while the mortgage is still being paid. Typically, when a home is sold in foreclosure, the mortgage is paid first, then the HOA.
However, there are exceptions.
In some states, including Nevada, Tennessee, and Washington, DC, to name a few, HOAs have “super priority” liens. This means the HOA can stay ahead of the mortgage lender if you default on your dues.
More and more homeowners are unfortunately losing their homes due to HOA debt. According to ATTOM Data Solutions, from 2022 to 2025, the number of HOA-related foreclosures jumped 50% nationwide, with Florida, Texas, and California being the states with the most significant foreclosures.
For buyers, this highlights that affordability challenges extend beyond purchase price and interest rates to ongoing costs of ownership.
— Ron Barber
Atom Representative Director and President
Before buying a home in an HOA community
- Treat your HOA dues like part of your mortgage. When purchasing a home with an HOA, monthly HOA costs are usually not included in the listed price, so they are often overlooked when determining what’s within your budget. Since HOA fees are ongoing and can increase over time, it’s wise to stress test your budget to ensure you can manage the potential for future fee increases.
- Check your HOA agreement. Before purchasing a home with an HOA, request an HOA agreement. Please take your time to carefully review all documents and understand all rules before moving in. Some HOAs are more efficiently managed than others, so check your association’s budget and reserve funds. It’s also helpful to read recent meeting minutes to see if deferred maintenance, potential litigation, or upcoming special assessments were discussed.
- Be careful if membership fees are very low. Lower rates may seem appealing, but in some cases, it may indicate that the HOA doesn’t have enough funds set aside for future repairs. If reserves are too low, the HOA may have to charge homeowners a special assessment or a large one-time fee to cover unexpected expenses.
Living in the shadow of HOA debt
When you buy a home in an HOA community, you don’t have to opt out of fees or special assessments. But that doesn’t mean you’re powerless. If you decide to challenge a rate increase or special assessment in court, Morgan’s advice is to tread wisely.
“If you’re going to do that, put the money in escrow,” she says. “If someone says, ‘You’re this far behind,’ you can say, ‘I have $20,000. I just don’t think I have to pay it for XYZ reasons.'” The judge will take you more seriously. ”
Communication is key, Morgan emphasizes. Please consult the board of directors. Avoid getting stuck in a cycle of always playing catch-up by negotiating a plan to pay off your debt while staying current. In some cases, she says, it may make sense to prioritize paying your HOA over other debts, even your mortgage.
“Your mortgage (company) will likely offer you a modification,” she says. “Your mortgage (company) likely has a forbearance program. Your HOA tends to rely more on that money, so they’re less likely to be reasonable. Balances are less likely to go down. Settlements are much less likely.”
Meleca-Voigt’s HOA gave her the option to pay the $3,000 special assessment bill in installments, easing some of the financial burden. In 2023, her wife also joined the HOA board, giving them first-hand knowledge of how the community operates.
But despite these victories, Meleka-Vogt and Christine are planning their next move. For the past 18 months, they have been looking for a more affordable, non-HOA home that accommodates Joe’s disability.
Let me be clear: we will never do that (buying a house with an HOA) again.
—Joe Meleka-Vogt
homeowner
Meleka Voigt feels stuck after losing out on potential housing five times. That’s because fears of rising HOA fees continue to cast a shadow over her finances.
“If HOAs continue to grow, we don’t have a choice. We don’t have a choice,” she says. “It’s scary. I’m 55 years old. I hope I’ll be healthy for another 30 years. If I’m still like this in five years, what are we going to do?”