The price for owning a home is rising rapidly – and we’re not just talking about mortgage payments.
US homeowners are now paying an average of $18,118 a year on property taxes, homeowners’ insurance, maintenance, energy and various other expenses linked to owning a home, according to a new Bankrate study.
That’s nearly the cost to buy a used car and represents a 26% increase from four years ago when it cost $14,428 annually to own and maintain a home.
Many Americans would like to buy a home but have been unable to because home prices have spiked to record highs and mortgage rates remain elevated. The housing market is historically unaffordable.
The per-month cost of owning and maintaining a home has gone from $1,202 a month in 2020 to $1,510 now, Bankrate found.
Home insurance rates jumped 11.3% nationally last year alone, according to S&P Global. The US homeowners insurance industry lost $101.3 billion last year as severe storms, hurricanes and wildfire did significant damage. And high inflation made it that much more expensive to rebuild properties.
The average cost of owning and maintaining a home in California is $28,790, according to Bankrate, second among all US states behind only Hawaii.
The top five is rounded out by Massachusetts ($26,313), New Jersey ($25,573) and Connecticut ($23,515).
By contrast, Kentucky ($11,559), Arkansas ($11,692) and Mississippi ($11,881) had the lowest hidden costs of homeownership, according to Bankrate.
Since Covid, the hidden cost of homeownership has climbed most rapidly in three states: Utah (44%), Idaho (39%) and Hawaii (38%).
Of course, the silver lining for homeowners is the fact that home values have gone up significantly since 2020.
Those gains have padded the net worth of millions of Americans. Median inflation-adjusted net worth swelleb by 37% between 2019 to 2022, according to the Federal Reserve.
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