Buying a home in the U.S. has become increasingly expensive, but what many may not realize is that the cost of keeping and maintaining a home has also risen significantly. A new report by Bankrate.com reveals that the “hidden costs” of homeownership amount to an average of $18,118 annually, or $1,510 a month. This figure includes property taxes, homeowners insurance, utilities like electricity, internet, and cable, as well as home maintenance costs estimated at 2% of the home’s value per year.
The report highlights that the national average for these hidden costs has spiked by 26% compared to four years ago, with expenses totaling $14,428 annually in 2020. This increase serves as a wake-up call for potential homebuyers who may not be adequately prepared for the financial burdens associated with homeownership aside from the mortgage payment.
One of the most surprising expenses for new homeowners is the ongoing costs of maintenance and repairs. These costs can vary significantly depending on the age and condition of the home. With a limited supply of new construction, many homes being purchased are older and may require costly upgrades to systems like HVAC units, windows, and roofing.
First-time homebuyers, in particular, may underestimate the true cost of maintenance and repairs, as these expenses are often learned through the trial and error of homeownership. Spending all of one’s savings on a down payment can leave new homeowners cash-strapped when it comes to essential repairs and maintenance, leading to increased debt and financial strain.
While competition in the housing market remains fierce, it is crucial not to overlook the importance of a thorough home inspection. Waiving a home inspection to secure a purchase can be risky, as it may result in unforeseen maintenance issues cropping up after closing. An inspection serves as a safeguard, providing insight into potential repairs and maintenance tasks that may impact the ongoing costs of homeownership.
Aspiring homeowners must be aware of the comprehensive financial commitment that comes with owning a home. Beyond the upfront costs of the mortgage, hidden expenses like maintenance, repairs, and utilities can quickly add up. Proper financial planning and a realistic budget are essential for ensuring long-term financial stability as a homeowner.
Becoming a homeowner is a significant milestone, but it also comes with financial responsibilities that extend beyond the initial purchase. By understanding and preparing for the hidden costs of homeownership, individuals can make informed decisions that support their long-term financial well-being. From budgeting for maintenance to prioritizing home inspections, taking a proactive approach to homeownership can help mitigate financial risks and ensure a sustainable homeownership experience.