UPDATED: Mar 6, 2023
Are you thinking of buying a condominium? Before you make a decision, it’s important to understand what you're buying and how much it will cost you.
Condos are often appealing to buyers because they generally pay less for a condo than a single-family home, and they often come with amenities, like swimming pools or fitness centers. However, several factors affect how much you pay for a condo beyond the price of a unit. So just how much does a condo cost in total?
We’ll take a look at the true cost of condo ownership, including how much you can expect to pay in condo fees, condo insurance, taxes and more. We’ll also discuss mortgage options for condos.
The cost of a condo will depend on several factors, including location, size and amenities. According to the National Association of REALTORS® (NAR), the average sales price for a condo in the U.S. was $357,600 as of July 2023. How much does that same condo cost to own per month? That’s $2,026 with a 20% down payment at current mortgage rates (based on an average 7.63%, 30 year fixed rate).
Now consider that NAR’s average single-family home price is higher at $412,300, and you can start to see the appeal of buying a condo.
Here’s a breakdown of the typical costs of condo ownership:
Average Costs Of Condo Ownership |
|
Sale Price |
$357,600 |
Monthly Mortgage Payment |
$2,026 (with a 20% down payment at current average interest rate of 7.63% at 30 yr fixed) |
Property Tax |
0.9% |
Monthly Condo Fees |
$350 |
Condo Insurance |
$513 per year |
Condo costs will vary depending on where you live. It can be helpful to reference some cities with the highest and lowest condo prices to gauge the affordability of condos in your area.
Here are the cities with the highest median condo sales prices in Q1 2023, according to NAR:
The cities with the lowest median condo sales prices in Q1 2023 were:
Like single-family homes and townhouses, property taxes on condos are determined by how much the property is worth. Property tax rates don’t differ for condos. Because property taxes vary by state, you can expect to pay 2.49% in New Jersey or 0.28% in Hawaii.
As with most things price-related, condo fees may vary. The amount charged is typically determined by how big the condo unit is, the included amenities and how much maintenance needs to be done.
According to Condo Manager USA, the average cost of condo fees nationwide is around $350 per month, but condo fees range significantly from city to city.
Considering condo fees cover features like pools and common areas and services such as a door attendant or waste removal, the fees can vary wildly depending on what a building offers and how much routine maintenance is required.
The building may also have a condo association. Much like a homeowners association (HOA), condo associations are community-operated organizations that set rules that govern a building and its amenities.
Condo fees are generally broken down into three payment categories:
Like any other type of real estate, you must purchase homeowners insurance when buying a condo. The cost of condo insurance, also known as HO6 insurance, will depend on how much you pay for the condo, how much coverage you need, how much money you put down as a deposit and how much risk is involved in the purchase.
According to Value Penguin, the average cost of condo insurance in the U.S. is $516 per year. Generally speaking, insurance is more expensive in states with a higher risk of natural disasters, like Florida or Texas, and less expensive in lower-risk states, like Utah or Wisconsin.
Yes, it’s possible to get a mortgage on a condo. Lenders require information about the condo association, how much money you plan to put down as a deposit and how much of the purchase price you intend to finance.
There are several types of home loans you may qualify for:
When considering how much a condo costs, remember that the total cost of ownership goes beyond the purchase price. You’ll likely need to factor in regular condo fees, insurance premiums, taxes and closing costs. When you account for these factors, you can be sure you’re making an informed decision when buying a condo.
If you’ve decided a condo is right for you and are ready to buy, start the approval process with Rocket Mortgage.
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