Budget Beyond the Price Tag: What Buyers Often Overlook in Homeownership Costs

According to a 2024 study by Zillow, the typical American homeowner spends over $15,000 annually on hidden homeownership costs and maintenance. These include property taxes, homeowners insurance, utilities, maintenance, and unexpected repairs — none of which are factored into the home's price tag.

Let’s break it down:

1. Property Taxes

Property taxes vary by location but can add a significant annual cost. In 2023, ATTOM Data Solutions reported that the average property tax bill in the U.S. was $4,062. Some states like New Jersey, Illinois, and New Hampshire have much higher rates — exceeding 2% of the home's value annually.

Example: For a $300,000 home in New Jersey, annual property taxes could be around $6,600.

2. Homeowners Insurance

Homeowners insurance is essential for protecting your investment, but it’s another recurring cost. The National Association of Insurance Commissioners (NAIC) states that the average homeowners insurance premium was $1,428 per year as of 2023 — and it’s rising due to extreme weather events and rebuilding costs.

Depending on where you live (think hurricane or wildfire zones), you may also need additional coverage like flood or earthquake insurance.

3. Utilities and Bills

The average utility bill (electricity, water, gas, and trash) for a single-family home in the U.S. ranges between $200 and $400 per month, according to EnergyStar.gov. New homeowners often underestimate these costs, especially if upgrading from an apartment to a larger property.

4. Maintenance and Repairs

Routine maintenance is key to keeping your home in good shape. Experts recommend budgeting 1% to 4% of your home’s value each year for maintenance. That means for a $300,000 home, expect to spend $3,000 to $12,000 annually.

Common costs include:

• HVAC servicing

• Roof inspections

• Plumbing fixes

• Lawn care and landscaping

According to HomeAdvisor, the average cost of a major home repair in 2023 was $3,150.

5. HOA Fees

If your home is in a community with a homeowners association (HOA), expect to pay monthly or annual fees. The Foundation for Community Association Research reports that the average monthly HOA fee is $250. Some upscale communities charge much higher.

Planning Ahead

Before purchasing a home, it's important to factor in these extra costs:

• Request a property tax estimate from your real estate agent or local assessor.

• Get insurance quotes based on the property's location and condition.

• Ask for average utility costs from the seller if possible.

• Schedule a professional inspection to anticipate immediate repair needs.

• Budget for emergency savings, especially for unexpected repairs.

Final Thoughts

Owning a home is a major milestone — but it comes with ongoing financial responsibility. By understanding all the costs beyond the listing price, you can budget smarter, avoid surprises, and truly enjoy the benefits of homeownership.