The average cost of homeownership has increased by 26% over the past four years to more than $18,000 annually, according to Bankrate’s newly released Hidden Costs of Homeownership study.
The increase reflects rising home prices, which went up 40% since the beginning of the COVID-19 pandemic, mainly due to a lack of inventory, according to the study.
It’s also due to growing property taxes and homeowners insurance premiums as providers exited states where risks are elevated.
“Homeownership is an important wealth-builder for many Americans, but it ain’t cheap,” Bankrate analyst Jeff Ostrowski said in the report. “These numbers show that the costs of owning a home are at the same level as buying a used car every year. While homeownership is worth the financial sacrifice, homeowners also need to be aware of the ongoing expenses that go along with owning property.
“No matter where you live, make sure you include some cushion in your monthly budget to absorb the shock of unplanned expenses,” Ostrowski added. “After you achieve homeownership, you need to fatten up your emergency savings account for all those surprise repairs.”
Bankrate calculated the average annual cost of owning a single-family home based on items such as property taxes, homeowners insurance and maintenance costs, as well as energy, internet and cable bills.
Bankrate estimates these costs at 2% of the typical home value, which stood at $436,291 in March, according to Redfin.
The data, published on Monday, showed that the average total expenses are $18,118 a year, or an additional $1,510 per month on top of a mortgage payment.
To compare, in 2020, the average was $14,428 a year, or $1,202 per month.
The most expensive state for these ongoing costs of homeownership is Hawaii ($29,015), where a typical single-family home price reaches $993,000, the data shows. Hawaii is followed by California ($28,790), Massachusetts ($26,313), New Jersey ($25,573) and Connecticut ($23,515).
Utah and Idaho, where home prices escalated during the COVID-19 pandemic, had the most significant percentage increase in homeownership costs from 2020 to 2024, at 44% and 39%, respectively.
Meanwhile, the least expensive states are Kentucky ($11,559), Arkansas ($11,692), Mississippi ($11,881), Alabama ($12,258) and Indiana ($12,259).
