Owning a home now costs $18k more annually

As if the sky-high home mortgage rates aren’t scary enough, buying and maintaining a home has also gotten more expensive. The “hidden costs” of homeownership now average $18,118 annually ($1,510 monthly), up 26% from $14,428 annually ($1,202 monthly) in 2020.

A new report by Bankrate.com adds that these costs include property taxes, insurance, utilities, and home maintenance, estimated at 2% of the home’s value yearly.

The expenses also differ depending on the location. Hawaii ($29,000), California ($28,800), and Massachusetts ($26,300) are the highest, while Kentucky ($11,600), Arkansas ($11,700), and Mississippi ($11,900) are the lowest.

Home insurance premiums have also significantly increased over the years, especially in regions prone to frequent natural disasters, according to Bankrate analyst Jeff Ostrowski.

Maintenance and repair costs, particularly for older homes, often surprise new homeowners. The median age of owner-occupied homes is about 40 years, and those usually require significant repairs like HVAC upgrades or new roofs.

First-time buyers often don’t realize the true cost of repairs and can end up in debt if they spend all their savings on the down payment.

Experts say skipping a home inspection is risky. Inspections can reveal needed repairs, helping buyers avoid costly surprises later. They advise buyers to budget for these expenses.