HOA fees are on the rise

by Marcus Paul

 

Condo shoppers have more to contend with than just rising home prices. According to a new report from Trulia, homeowners association (HOA) fees are on the rise across the nation.

The U.S. has seen a rise in homeowners association (HOA) fees since 2005, according to the report. It shows that the average HOA fee in 2005 was $250. Ten years later, in 2015, the average fee increased to $331. This increase outpaced the nation’s home price growth and also exceeded the inflation rate by 5.9 percent.

Even throughout the decade’s housing crisis and recession, HOA fees continued to march upward and onward. Trulia delved into the types of properties and markets that are likely to have high HOA fees and what caused these fees to rise so consistently.

 

Residential building age

For every year that a building gets older, the HOA fees increase. For example, the report found that the HOA fees paid by households in buildings constructed in 2005 or later were about $90 per month cheaper than monthly fees in homes built between 1960 and 1969.

Trulia’s research shows that the main reason for the consistent rise in HOA fees over the past decade is because the average residential building in the United States is increasingly getting older, and older buildings tend to require higher HOA fees.

 

Number of units 

More units also equal higher HOA fees. Buildings with 20 to 29 units had monthly HOA fees that were $160 higher per month than single family detached homes within a development, while buildings with 50 or more units had monthly HOA fees that were $330 higher than the same single family homes. The report also estimates that an additional bedroom in a home increased the HOA fee by $30 a month.

 

HOA fee winners and losers

Out of the 50 largest metro areas in the United States with occupied housing units, New York had the highest average HOA fee paid by households at $571 per month. Miami came in fourth with an average monthly HOA fee of $415. Areas with the lowest average HOA fee paid by households included Nashville ($194) and Las Vegas ($198).

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