After the pandemic-era mortgage rates dipped below 3%, launching a surge of homebuying, aspiring homeowners now face a much tougher landscape: rates climbed as high as 8% in October 2023. That spike forced many would-be buyers—especially younger people—out of the market.
But amid that broader affordability crisis, one slice of the housing market may be offering a rare opening for Gen Z and millennials: condominiums.
Though national home prices remain steep—about 51% higher than they were in 2020, according to the Case-Shiller Index—condo prices have actually begun to slip. Redfin reports that condo values dropped 2% year-over-year in May, marking the second-sharpest annual decline since the company began tracking the data in 2012.
The dip isn’t due to a lack of interest, experts say. Rather, buyers are backing away because condo ownership costs are rising sharply—with steep hikes in HOA dues and insurance premiums driving the trend. Redfin data puts the average U.S. condo price at $354,100.
“Higher monthly fees are discouraging many buyers,” said Jaclyn Bild, a broker associate with Douglas Elliman in Miami. “That’s created a slight increase in listings and longer time on market—giving buyers a little more power than they’ve had recently.”
For younger would-be homeowners, often priced out of bidding wars and burdened by rising mortgage costs, this could represent an overdue opportunity to finally enter the housing market.
Condos: a possible path to ownership
While condos come with tradeoffs—shared walls, less privacy, and monthly association fees—they tend to cost less than single-family homes and require less maintenance, making them an appealing option for first-time buyers.
In Colorado, realtor Brett Johnson of New Era Home Buyers told Fortune that condo prices have been softening since June 2024. Back then, the average closing price was $416,000. A year later, it had slipped to $405,000, a 2.6% drop.
“It’s not a massive decline,” Johnson said, “but it’s enough to get buyers paying attention.”
While challenges remain—high borrowing costs and older generations holding onto homes longer—it’s possible that this moment in the condo market could offer younger Americans a much-needed foothold into homeownership.
