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Categories: US Real Estate

The hidden costs of homeownership add up to $9K a year, study finds

Homeowners will pay around $9,390 per year on the hidden costs associated with homeownership, according to a new analysis by Thumbtack and Zillow.

The real estate companies say that many home shoppers frequently only focus on the obvious costs of owing a home, such as the mortgage payments. But many forget that they’re also responsible for other costs, including property taxes, insurance and maintenance.

Also, Thumbtack and Zillow say that around a third of buyers have trouble determining their homebuying budgets while they’re in the process of looking for a home to buy. That’s why the companies undertook this study, to help prospective homeowners better understand the additional costs they will have to pay on an annual basis. The analysis also takes into account the cost of utilities, with estimates provided by UtilityScore.

Property tax, utilities and in most cases, homeowner’s insurance are expenses that homeowners cannot avoid. On average in the U.S. these costs come to $6,327 per year, though they can be significantly higher in more expensive markets. For example in San Jose, where a typical home sells for over $1.2 million, these costs can be as high as $17,255 per year. However in Indianapolis, where homes are much cheaper, the costs only add up to $5,540 per year.

There are also non-essential costs that many homeowners will choose to pay by hiring professionals for various home maintenance tasks. These include cleaning services, carpet cleaning, lawn care, air conditioning and heating systems maintenance, pressure washing and more. Nationwide, the average cost of these services amounts to $3,067 per year. Of course, it varies on a regional basis as labor costs differ across the country. In Portland, Oregon, homeowners typically spend $3,810 per year on maintenance, compared to just $2,570 in Miami.

"Ongoing maintenance costs and annual fees are some of the most common surprises for first-time home buyers after they finally become homeowners. While they are shopping, buyers tend to focus on their monthly mortgage payments, but other needs quickly add up after move-in," said Zillow Senior Economist Aaron Terrazas. "The list price is just the beginning of understanding the costs that come with being a homeowner, and it's important to understand what other expenses you may have to account for when determining what you can afford."

"Many basic maintenance costs are often overlooked when calculating the cost of buying a home," said Lucas Puente, Lead Economist at Thumbtack. "It's imperative that those looking to buy a home do their homework to avoid any surprising charges."

Mike Wheatley

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at mike@realtybiznews.com.

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