Homeowners and condo associations should expect both the number of communities and units within them to grow this year, but the pa moderating from the previous decade's pace, according to a new report.
Although homeowners and condo associations are anticipated to grow in the number of communities and units this year, the rate of expansion is slower than in the past decade.
The U.S. will see between 3,000 to 4,000 such organizations begin to form in 2025 to total 373,000 nationwide. The number represents a 10.8% jump from the year-end 2024 total of 369,000, according to research from the Foundation for Community Association Research.
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"Community associations continue to be a resilient and popular housing option," said Dawn M. Bauman, chief strategy officer of the institute and executive director of its FCAR research partner, in a press release.
The volume of associations increased by 14,000 in the last five years, compared to 355,000 over the five years ending with the close of 2020. At the current pace, this decade will see fewer newer developments compared to the prior 10 years when just under 44,000 were added.
Inventory in HOAs and condo associations hitting the market in 2025 will increase by 11.7%, the report found, with growth coming from both new construction and housing turnover.
"As market conditions stabilize, we anticipate steady growth in the development of new communities," Bauman continued.
The data comes at the same time new research on larger master-planned communities reported a similar growth outlook. MPCs frequently oversee at least one and often multiple homeowners associations within their borders.
In 2024, though, the number of homes sold in MPCs decreased by approximately 2%, the study from RCLCO Real Estate Consulting found. Still, sales volumes were "a positive sign, given the economic, political, and even physical headwinds experienced in 2024," according to RCLCO managing director Gregg Logan.
Sales in the most popular master-planned communities were prevalent in Florida, which accounted for 38% of deals to lead all states. Texas followed at 35%, with the Houston metropolitan area the top performing market in the U.S.
Residents' views on dealing with homeowners associations show a range of diverging opinions, though.
In 2024 research on homeowner satisfaction commissioned by FCAR, an overwhelming majority of 86% of HOA residents rated their experience as either good or very good.
At the same time, just under two-thirds, or 63%, thought membership made their properties more valuable. Prior research from policy think tank Cato Institute said homes in HOA communities were worth about 5% to 6% higher.
On the other hand, additional studies last year threw some cold water on the enthusiasm with associations' fees and conflicts with HOA leadership boards leading to disgruntled homeowners. Inflation this decade and surging insurance costs in parts of the country have led to sometimes steep hikes in HOA fees.
A study by repair and maintenance services firm Frontdoor in the latter half of 2024 found 51% of HOA residents reporting an increase in association fees, with 65% saying hikes happened frequently.
More than half also thought their board leadership established and punished homeowners for rules they disagreed with, and approximately one-third also called out how regulations were applied as "unfair."
In another 2024 survey, Rocket Mortgage determined only 47% of homeowners living in an HOA thought their community was better as a result of it, and two-thirds were skeptical the association handled finances responsibly. Ten percent also said they would consider selling as a result of their HOA experience.
Dissatisfaction also appeared among a portion of board members, with 37% of them finding the HOA experience undesirable, according to Rocket.
