Hidden costs of homeownership average $18,000 per year

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It's no secret that buying a house in the US has become more expensive. But the cost of owning and maintaining a home has also become significantly more expensive, which may come as a surprise to some buyers.

The “hidden costs” of homeownership average $18,118 annually, or $1,510 per month. according to to a new report from Bankrate.com. The national figure includes the average cost of property taxes, homeowners insurance and electric, internet and cable bills. This also includes home maintenance, which is estimated at 2% per year of the value of a home.

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The price tag of such hidden costs within a typical single-family home in the U.S. is roughly 26% higher compared to four years ago, the report found. In 2020, the same expenses were $14,428 per year, or $1,202 per month.

“It's just important to understand that you're buying a lot more than just a mortgage payment,” said Jeff Ostrowski, an analyst at Bankrate.com. “You're also buying all these extra costs that you have to figure out how to pay for.”

The national average mortgage payment in April was $2,256, an increase of $144 or 6.8% from a year ago. according to to the Association of Mortgage Bankers.

Older homes may require more repairs

Of all the expenses used to calculate the national average, maintenance and repair costs often surprise new homeowners more because of how much repair costs can vary depending on the age of the home, experts say.

“Because of the lack of development, we know the homes being purchased are older,” said Jessica Lautz, deputy chief economist at the National Association of Realtors.

“Homebuyers have to make compromises along the way, and often it comes down to the age or condition of the home,” she said.

While the available supply on the market increases; many of these homes were built decades ago, according to to the US Census Bureau's 2022 American Community Survey. The research shows that the average age of owner-occupied homes in the US is approximately 40 years.

A home around that age may need system upgrades, so consider a new HVAC [heating, ventilation, and air conditioning] unit, or windows, or doors,” Lautz said.

A roof lasts about 30 years on average as long as vinyl siding can last three to four decadesaccording to Angi.com, an online marketplace that connects homeowners with professional contractors for home maintenance or renovations.

“Those are the types of costs that can add up quickly,” Ostrowski said.

For beginners, repairs are 'part of the learning process'

First-time homebuyers in particular don't realize the true costs of maintenance and repairs because such expenses are “part of the learning process of becoming a homeowner,” Ostrowski said.

“If you've been a homeowner for a while, you realize what can go wrong,” he says.

Don't neglect a home inspection

86% of Consumers Think It's a Bad Time to Buy a Home: Fannie Mae

But forgoing the inspection is risky and not something to do lightly. An inspection is an important safeguard that can help you purchase and understand some of the maintenance tasks and repairs that may lie ahead.

Otherwise, it can be a factor that can drive up ongoing costs after you close on a home, Ostrowski said.

'That certainly carries the risk of someone entering a home and not realizing that the [air conditioning] was about to leave, or the boiler was on its last legs, or the roof needed to be replaced,” he said.

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