Condo Sales Dropped Amid Rising Fees and Insurance Costs

Higher insurance premiums and stricter federal lending standards have cooled demand for condominiums across the U.S.

Updated on Sept. 18, 2026 in Residential

Bold vector editorial illustration of a modern condo building resting on a heavy concrete block, representing the financial weight of rising property costs. — Condominium sales in the U.S. fell 2.7% in August as buyers were deterred by rapidly increasing insurance premiums and homeowners association fees. AI Illustration. Upload story photo >

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Condominium and co-op sales fell 2.7% in August 2026 as homeowners face a combination of rising insurance premiums and higher HOA fees. Many condo associations are increasing monthly costs to meet new financial reserve requirements and cover escalating insurance bills.

Why it matters

The surge in fees is driven by insurers raising rates after natural disaster losses and the looming implementation of new federal reserve standards. These financial pressures have made it harder for buyers to secure financing, as lenders now demand stringent insurance coverage from associations.

The median national HOA fee rose to $135 in 2025, up from $108 in 2019, while 44% of homes for sale last year required HOA payments. Additionally, the median special assessment bill grew to $1,100, impacting 8.5% of buildings constructed before 2000.

The players

Fannie Mae

This government-sponsored enterprise provides liquidity to the mortgage market by purchasing home loans from lenders.

Freddie Mac

This government-sponsored enterprise works to provide stability and affordability to the U.S. housing market by backing mortgages.

The details

Mortgage lenders now frequently deny financing if buildings fail to maintain master insurance policies covering 100% of replacement-cost value. With 54% of associations planning further fee hikes, owners are increasingly relying on special assessments to fund expenses when building reserves are insufficient.

The median national HOA fee was $108 in 2019.
In 2025, the median national HOA fee reached $135.
Fannie Mae and Freddie Mac announced new lending standards in March 2026.
Condo and co-op sales fell 2.7% in August 2026.
New financial reserve standards for condo associations go into effect in 2027.

Culture Shift

The current market turbulence marks a significant departure from the historical affordability of condo living as the industry prepares for the 2027 federal financial reserve standards for condo associations. This transition is forcing a fundamental shift in how associations manage capital long-term.

Prospective buyers should anticipate stricter mortgage approval processes and potentially higher monthly carrying costs when evaluating units in older buildings. Current owners may see unexpected special assessments as associations move to bolster their reserve funds ahead of 2027 mandates.

The takeaway

Prospective buyers should review an association's financial health and master insurance policy before making an offer to avoid future financial surprises. Homeowners currently in the market should prepare for sustained increases in monthly HOA dues as associations align with new federal reserve requirements.