A recent study reveals that the annual cost to own and maintain a single-family house exceeds $18,000.
While owning a home can be a great way to build wealth, the maintenance costs can quickly add up. Bankrate’s analysis shows that homeownership costs in the U.S. have surged by 26% since 2020, amidst rising inflation, near $390,000 house prices, and lowered mortgage rates.
The stark differences among states are influenced by various factors like home prices, local taxes, and inflation.
This map illustrates the hidden costs associated with homeownership.
In high-cost areas like California, Hawaii, and New Jersey, the average single-family homeowner spends over $25,000 yearly, while states like Arkansas, Kentucky, and Mississippi have lower costs, averaging around $12,000 per year.
Hawaii: Homeowners here face an average yearly cost of $29,015, making it the most expensive state in America due to a pricey real estate market. A typical home costs $993,000, with maintenance costs accounting for almost $20,000. Additional expenses include property taxes, homeowners insurance, internet, cable, and energy bills.
California: With an annual cost of $28,790, homeowners have maintenance costs of roughly $16,966 for an average home price of $848,300. Other costs include property taxes, insurance, internet, cable, and energy bills.
New Jersey: Known for its high property taxes averaging $10,026 yearly, highest in the country, combined with a median home price of $502,400, the state incurs maintenance costs of $10,048, leading to total hidden costs of around $25,573 yearly.
Conversely, Kentucky, Arkansas, and Mississippi offer more affordable homeownership. Kentucky homeowners pay an average of $11,559 annually, with a median home value of $255,800, resulting in maintenance costs of $5,116. The state’s lower property values lead to relatively lower property taxes and additional expenses for energy, internet, and insurance.
Ostrowski highlighted that ongoing maintenance and repairs form the bulk of their cost estimate, based on homeowners spending 2% of a home’s purchase price annually. Insurance rates have also risen due to construction costs and natural disasters, posing challenges for first-time homebuyers seeking affordable properties.