When shopping for a home, many buyers may hope to avoid purchasing a property subject to a homeowners association.
But that may be easier said than done.
That’s because HOAs are on the rise in the U.S. Therefore it’s important to understand the ins and outs of these organizations before you buy.
Nearly three-quarters, or 70%, of surveyed homeowners say if they were to buy a new home in the future, they would prefer a community without an HOA, according to recent data from Frontdoor. The home repair and maintenance services company in September polled 1,005 homeowners, 85% of whom are currently part of an HOA.
Why it’s hard to avoid HOAs
Homeowners associations are composed of community residents elected to a board of directors, which govern the neighborhood by a set of rules and regulations. Homeowners pay dues to have common areas like parks, roads, and community pools maintained and repaired.
Such organizations exist for different types of properties, from single-family homes and rowhomes to condominiums and cooperatives.
The presence of HOAs in the U.S. has ballooned over recent decades. In 1970, there were 10,000 community associations with about 2.1 million residents, per the Foundation.
In 2023, about 65% of new single-family homes were built within HOAs, up from 49% in 2009, according to the U.S. Census.
Today, HOA or common-interest communities represent about 30% of the housing stock in the U.S., and house 75.5 million Americans, according to the Foundation for Community Association Research. The entity is an affiliate organization of Community Associations Institute, a membership group for HOAs and other community organizations.
Common-interest communities are becoming more typical because they provide a financial benefit for local governments, according to Thomas M. Skiba, CEO of the Community Associations Institute, a membership organization of homeowner and condominium associations.
“They don’t have to plow the street anymore [or] do all that maintenance and they still collect the full property tax value,” Skiba told CNBC, referring to local authorities.
HOA membership is more common in some areas. Florida has the highest HOA membership rate of 66.86%, or more than 4 million homes in HOAs, according to a data analysis by This Old House, a home improvement site.
“It is truly a luxury in a lot of cases to buy a home that’s not in a community,” said Steve Horvath, co-founder of HOA United, an advocacy group for homeowners in common-interest communities.
How HOAs add to homeownership costs
The price tag that comes with a common interest community will depend on it’s location and the amenities the association offers.
The mandatory membership can cost homeowners as little as $100 a year to more than $1,000 a month, depending on the community, according to the American National Bank of Texas.
Such costs tend to increase over time, and rarely go down. In Frontdoor’s survey, 51% of current HOA members said they experienced an increase in their HOA fees, and 65% say price increases happen frequently.
How to vet an HOA before you buy
Many Americans are satisfied with their HOA. About 60% of surveyed homeowners reported having a positive experience with their community, according to Frontdoor.
But others go through grievances. About 1 in 3 had some experience that made them want to move, Frontdoor found. Of those wanting to leave the neighborhood, 63% complained about fees while 53% cited inconsistent rule enforcement.
“Sometimes HOAs can be really intrusive,” like what colors you can choose from to paint the exterior of your house, said Jim Tobin, CEO of the National Association of Home Builders.
If you’re currently in the market for a home and are unsure if an HOA community is right for you, here are a few things to consider in the shopping process:
Ask your real estate agent or the home seller’s agent for a copy of all the HOA paperwork like covenants, bylaws, fee schedule, rules and regulations, experts say. Also ask for meeting minutes, whether annual general meeting minutes or board meeting minutes for the past 12 months, Horvath said. Such documents can be very telling about how an HOA is operated, he said.
Inquire about monthly or annual fees, the HOA’s budget and the history of how assessments have grown over the years, according to Skiba.
Ask your real estate agent or the seller’s agent if the house you want to buy has any unpaid assessments, said Horvath. Such outstanding balances should be dealt by the seller as part of the sale.
Review any pending litigation, disputes or existing judgements within the community, said Horvath.
Look into the community’s reserve funds, which ensures repair and renovation. Check if the community is putting enough money aside for big expenses or if they are property funded, Skiba said.
Ask if you can attend a board meeting or the member’s annual general meeting if possible.
A person holds a sign during a protest against cuts made by U.S. President Donald Trump’s administration to the Social Security Administration, in White Plains, New York, U.S., March 22, 2025.
Nathan Layne | Reuters
The Trump administration’s appeal of a temporary restraining order blocking the so-called Department of Government Efficiency from accessing sensitive personal Social Security Administration data has been dismissed.
The U.S. Court of Appeals for the 4th Circuit on Tuesday dismissed the government’s appeal for lack of jurisdiction. The case will proceed in the district court. A motion for a preliminary injunction will be filed later this week, according to national legal organization Democracy Forward.
The temporary restraining order was issued on March 20 by federal Judge Ellen Lipton Hollander and blocks DOGE and related agents and employees from accessing agency systems that contain personally identifiable information.
That includes information such as Social Security numbers, medical provider information and treatment records, employer and employee payment records, employee earnings, addresses, bank records, and tax information.
DOGE team members were also ordered to delete all nonanonymized personally identifiable information in their possession.
The plaintiffs include unions and retiree advocacy groups, namely the American Federation of State, County and Municipal Employees, the Alliance for Retired Americans and the American Federation of Teachers.
“We are pleased the 4th Circuit agreed to let this important case continue in district court,” Richard Fiesta, executive director of the Alliance for Retired Americans, said in a written statement. “Every American retiree must be able to trust that the Social Security Administration will protect their most sensitive and personal data from unwarranted disclosure.”
The Trump administration’s appeal ignored standard legal procedure, according to Democracy Forward. The administration’s efforts to halt the enforcement of the temporary restraining order have also been denied.
“The president will continue to seek all legal remedies available to ensure the will of the American people is executed,” Liz Huston, a White House spokesperson, said via email.
The Social Security Administration did not respond to a request from CNBC for comment.
Immediately after the March 20 temporary restraining order was put in place, Social Security Administration Acting Commissioner Lee Dudek said in press interviews that he may have to shut down the agency since it “applies to almost all SSA employees.”
Dudek was admonished by Hollander, who called that assertion “inaccurate” and said the court order “expressly applies only to SSA employees working on the DOGE agenda.”
Dudek then said that the “clarifying guidance” issued by the court meant he would not shut down the agency. “SSA employees and their work will continue under the [temporary restraining order],” Dudek said in a March 21 statement.
Many Americans are paying a hefty price for their credit card debt.
As a primary source of unsecured borrowing, 60% of credit cardholders carry debt from month to month, according to a new report by the Federal Reserve Bank of New York.
At the same time, credit card interest rates are “very high,” averaging 23% annually in 2023, the New York Fed found, also making credit cards one of the most expensive ways to borrow money.
“With the vast majority of the American public using credit cards for their purchases, the interest rate that is attached to these products is significant,” said Erica Sandberg, consumer finance expert at CardRates.com. “The more a debt costs, the more stress this puts on an already tight budget.”
Most credit cards have a variable rate, which means there’s a direct connection to the Federal Reserve’s benchmark. And yet, credit card lenders set annual percentage rates well above the central bank’s key borrowing rate, currently targeted in a range between 4.25% to 4.5%, where it has been since December.
Following the Federal Reserve’s rate hike in 2022 and 2023, the average credit card rate rose from 16.34% to more than 20% today — a significant increase fueled by the Fed’s actions to combat inflation.
“Card issuers have determined what the market will bear and are comfortable within this range of interest rates,” said Matt Schulz, chief credit analyst at LendingTree.
APRs will come down as the central bank reduces rates, but they will still only ease off extremely high levels. With just a few potential quarter-point cuts on deck, APRs aren’t likely to fall much, according to Schulz.
Despite the steep cost, consumers often turn to credit cards, in part because they are more accessible than other types of loans, Schulz said.
In fact, credit cards are the No. 1 source of unsecured borrowing and Americans’ credit card tab continues to creep higher. In the last year, credit card debt rose to a record $1.21 trillion.
Because credit card lending is unsecured, it is also banks’ riskiest type of lending.
“Lenders adjust interest rates for two primary reasons: cost and risk,” CardRates’ Sandberg said.
The Federal Reserve Bank of New York’s research shows that credit card charge-offs averaged 3.96% of total balances between 2010 and 2023. That compares to only 0.46% and 0.43% for business loans and residential mortgages, respectively.
As a result, roughly 53% of banks’ annual default losses were due to credit card lending, according to the NY Fed research.
“When you offer a product to everyone you are assuming an awful lot of risk,” Schulz said.
Further, “when times get tough they get tough for most everybody,” he added. “That makes it much more challenging for card issuers.”
The best way to pay off debt
The best move for those struggling to pay down revolving credit card debt is to consolidate with a 0% balance transfer card, experts suggest.
“There is enormous competition in the credit card market,” Sandberg said. Because lenders are constantly trying to capture new cardholders, those 0% balance transfer credit card offers are still widely available.
Cards offering 12, 15 or even 24 months with no interest on transferred balances “are basically the best tool in your toolbelt when it comes to knocking down credit card debt,” Schulz said. “Not accruing interest for two years on a balance is pretty hard to argue with.”
Andrew Ross Sorkin speaks with BlackRock CEO Larry Fink during the New York Times DealBook Summit in the Appel Room at the Jazz at Lincoln Center in New York City on Nov. 30, 2022.
In a new letter to investors, Fink writes the traditional allocation comprised of 60% stocks and 40% bonds that dates back to the 1950s “may no longer fully represent true diversification.”
“The future standard portfolio may look more like 50/30/20 — stocks, bonds and private assets like real estate, infrastructure and private credit.” Fink writes.
Most professional investors love to talk their book, and Fink is no exception. BlackRock has pursued several recent acquisitions — Global Infrastructure Partners, Preqin and HPS Investment Partners — with the goal of helping to increase investors’ access to private markets.
The effort to make it easier to incorporate both public and private investments in a portfolio is analogous to index versus active investments in 2009, Fink said.
Those investment strategies that were then considered separately can now be blended easily at a low cost.
Fink hopes the same will eventually be said for public and private markets.
Yet shopping for private investments now can feel “a bit like buying a house in an unfamiliar neighborhood before Zillow existed, where finding accurate prices was difficult or impossible,” Fink writes.
60/40 portfolio still a ‘great starting point’
After both stocks and bonds saw declines in 2022, some analysts declared the 60/40 portfolio strategy dead. In 2024, however, such a balanced portfolio would have provided a return of about 14%.
“If you want to keep things very simple, the 60/40 portfolio or a target date fund is a great starting point,” said Amy Arnott, portfolio strategist at Morningstar.
If you’re willing to add more complexity, you could consider smaller positions in other asset classes like commodities, private equity or private debt, she said.
However, a 20% allocation in private assets is on the aggressive side, Arnott said.
The total value of private assets globally is about $14.3 trillion, while the public markets are worth about $247 trillion, she said.
For investors who want to keep their asset allocations in line with the market value of various asset classes, that would imply a weighting of about 6% instead of 20%, Arnott said.
Yet a 50/30/20 portfolio is a lot closer to how institutional investors have been allocating their portfolios for years, said Michael Rosen, chief investment officer at Angeles Investments.
The 60/40 portfolio, which Rosen previously said reached its “expiration date,” hasn’t been used by his firm’s endowment and foundation clients for decades.
There’s a key reason why. Institutional investors need to guarantee a specific return, also while paying for expenses and beating inflation, Rosen said.
While a 50/30/20 allocation may help deliver “truly outsized returns” to the mass retail market, there’s also a “lot of baggage” that comes with that strategy, Rosen said.
There’s a lack of liquidity, which means those holdings aren’t as easily converted to cash, Rosen said.
What’s more, there’s generally a lack of transparency and significantly higher fees, he said.
Prospective investors should be prepared to commit for 10 years to private investments, Arnott said.
And they also need to be aware that measurement issues with asset classes like private equity means past performance data may not be as reliable, she said.
For the average person, the most likely path toward tapping into private equity will be part of a 401(k) plan, Arnott said. So far, not a lot of companies have added private equity to their 401(k) offerings, but that could change, she said.
“We will probably see more plan sponsors adding private equity options to their lineups going forward,” Arnott said.