Rising Condo Costs Have Cooled Home Sales
Higher HOA fees and new insurance requirements for condo buyers have slowed sales and increased costs for owners.
Updated on Sept. 18, 2026 in Residential
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Condo and co-op sales dropped 2.7% in August 2026 compared to the same month last year as buyers faced increased financing hurdles. These challenges follow new lending standards for condominium buildings that prioritize strict financial reserves and insurance coverage.
Why it matters
Higher insurance premiums and federal reserve mandates have forced community associations to raise monthly fees, which complicates sales for current owners. These market shifts now limit buyer access to mortgage credit, as lenders deny loans for buildings that fail to meet new insurance requirements.
The median national HOA fee rose to $135 in 2025, up from $108 in 2019, while 54% of associations plan further increases. Additionally, 8.5% of older buildings issued special assessments in 2025, with the median bill climbing to $1,100.
The players
Fannie Mae
A government-sponsored enterprise that provides liquidity to the mortgage market by setting standards for the loans it purchases.
Freddie Mac
A government-sponsored enterprise that establishes safety and soundness requirements for condominium projects financed by home loans.
The details
Mortgage lenders now require condo buildings to maintain master insurance policies that cover 100% of replacement-cost value, leading to denials for buyers in non-compliant buildings. Simultaneously, condo associations are increasing monthly dues to meet new federal financial reserve standards set for 2027. When reserves are insufficient, owners face unexpected special assessments to cover shared costs, further straining individual household budgets.
Timeline
2019: Median national HOA fees were $108.
2025: Median national HOA fees reached $135.
March 2026: Fannie Mae and Freddie Mac announced new lending standards.
August 2026: Condo and co-op sales fell 2.7%.
2027: New financial reserve standards take effect.
Money Landscape
The current difficulty in the condo market follows the implementation of new lending standards by federal entities in early 2026. This environment marks a departure from the lower-fee landscape seen in 2019 as the industry braces for the 2027 financial reserve mandates.
If you own a condo, check your association's latest budget disclosures to see if a special assessment is planned to meet 2027 reserve requirements. Prospective buyers should consult a financial professional to verify whether a building's insurance coverage meets current mortgage lender standards.
The takeaway
The combination of higher insurance premiums and stricter lending rules is creating a new cost floor for condo owners nationwide. Review your association's reserve study document to understand if your community's monthly fees or special assessments are likely to increase before 2027.
Further reading
Learn more about the current Residential market conditions and how they impact home ownership.
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