Total Cost of Ownership Will Become More Important

With rising costs for property taxes, home insurance, maintenance and adapting to a changing climate, the total costs for homeownership are far more than just mortgage principal and interest payments alone.
According to a study in mid-2024 by Bankrate, these annual variable costs for a typical single-family home rose by nearly 26% between March 2020 and March 2024 to over $18,000 per year, or $1,510 per month. Add to this the cost to finance the median-priced single-family home of $2,278 per month, and the total cost of ownership rises to nearly $3,800 per month. As a point of comparison, renting a typical single-family home in March 2024 was $2,236 per month, or 30% less. It is because of this cost differential that so many would-be homebuyers are preferring to rent.
In addition, given that more residents are living in communities with HOAs, they'll need to budget for monthly fees and special assessments. According to the Foundation for Community Association Research, over 75 million Americans live in one of the 30% of residences governed by an HOA, and that number is expected to grow in the years ahead.
 
Although the national average monthly fee is $259 and generally covers some of the costs otherwise borne by a homeowner not living in an HOA, living in a poorly run community can mean catastrophically high assessments later. That's why it's crucial when buying a home in an HOA to carefully examine all governing documents, meeting minutes as well as the most recent annual budget and reserve study.