Why Americans Are Surprised by the Real Cost of Owning a Home

Owning a home is a quintessential part of the American Dream. While owning a home can be a smart long-term investment, a recent study found that 60% of U.S. homeowners have experienced buyer’s remorse after their purchase, with one in four saying they often regret buying their home.

One of the chief reasons for that disconteappnt: Owning a home costs more time and money than many expected. The study found that 52% of Americans are surprised by how much it truly costs to own a home. And one in eight said the benefits of owning a home aren’t worth the hassles that come with it.

Let’s take a closer look at the report’s findings, along with tips to help you prepare for the costs of homeownership so you can avoid buyer’s remorse.

Understanding the Financial Impact

When shopping for a home, most first-time buyers are prepared for paying a down payment and monthly mortgage installments. But they might underestimate the additional costs, including maintenance, property taxes, insurance and utilities. On average, a homeowner can expect to pay $15,405 per year on their home on top of their mortgage. 

Those costs have gone up in recent years. Due in part to the current real estate market, housing is becoming increasingly unaffordable for many homeowners. Three in 10 homeowners (29%) are spending more than 40% of their household income on housing expenses. Before the pandemic, only 16% of homeowners spent that much.

If you’re looking to buy a home in 2022, it’s important to do your research. Take a close look at the current market and make sure you can minimize your mortgage payment and additional costs so you don’t find yourself overspending.

Homeowners’ Biggest Regrets

More than 70% of Americans admit they regret at least one aspect of buying their home. The study found the most common regents are: 

  • 40% say their home requires too much maintenance
  • 32% say it is too small or it lacks desired features
  • 30% say they were unprepared for the hidden costs

Property taxes are one of the biggest, and most expensive, hidden costs due every year for a homeowner. When looking at a home’s listing on websites, take note of how much the current and past owners have spent on taxes. Where you live plays a big role in how much you can expect to pay. For example, the average homeowner in New Jersey pays 14 times more in property taxes than an average owner in Alabama each year. 

Other homeowners may be surprised by how much they pay in utilities. Homeowners spend an average of $4,829 on utilities each year — about $2,000 more than renters spend. 

To avoid sticker shock, ask lots of questions about finances when you tour properties. This can include how much time and money the current owners spend on maintenance, as well as a history of previous maintenance issues.

When it comes to avoiding regrets about the home itself, make a list of amenities and traits that are most important for you to have. Prioritize that list by what is most to least important. Share that list with your real estate agent. It’s important to work with an agent who will have your best interests at heart. Look for resources about how to choose a realtor who will not only get you the best deal on your home, but help you to buy with no regrets. 

Preparing for Home Repair Costs

Whether you’re buying a historic home or building a new house from the ground up, every home will require maintenance and repairs over time. The most common updates homeowners make include painting, repairing major appliances (washer and dryer repair, ac repair, etc.), plumbing, electrical, and roofing. For many homeowners, the time and cost associated with maintaining a home can come as a shock.

On average, a homeowner can expect to spend 19 hours a month making repairs and improvements on their home. That breaks down to more than four hours a week and nearly 230 hours every year. If you already work a lot of hours or have a side hustle to help pay for your mortgage, you may find yourself stretched for time.

In addition to investing their time, one-third of American homeowners spent more than $5,000 on maintenance in 2021. In particular, Millennials were about three times more likely to spend that amount than baby boomers.
If you’re concerned about the amount of time and money it will take to maintain a home, share that with your real estate agent in advance. As your representative, one of an agent’s most important jobs is to negotiate with the seller. They might be able to secure a maintenance allowance for you to handle costly repairs for things like plumbing or electrical issues. They can also ask the seller to make those repairs for you as part of the sale agreement.

About 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 [email protected]

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