Paying your mortgage is not the only expense homeowners face, there are many “hidden” expenses that homeowners encounter, and those expenses add up quickly, no matter how minor they may be.
According to a new analysis by Zillow and Thumbtack, utility bills, property taxes, insurance and essential home maintenance can add up to $14,155 a year for the average U.S. homeowner. That's an additional $1,180 per month on top of a typical mortgage payment.
And that figure is not static; annual hidden costs range from $9,886 in Las Vegas to $22,791 in San Francisco. First-time home buyers facing affordability challenges in today's market need to understand and budget for these less obvious expenses when calculating how much home they can afford.
Specifically, the two companies looked at three unavoidable expenses for single-family homeowners: property taxes, homeowners insurance, and utility payments. These three expenses averaged $7,742 annually, on a national basis. New Yorkers pay the highest property taxes, topping $9,000 per year, while utilities cost the most in Hartford, Connecticut, averaging $4,443 a year. Costs for homeowners insurance vary based on home value, so homeowners in the most affordable metro areas, such as Pittsburgh and Cleveland, have the added benefit of lower insurance bills.
Additionally, the analysis also included 17 essential home maintenance projects as cited by Thumbtack, which was derived from a list of millions of home improvement projects completed across the country. These improvements cost homeowners an average of $6,413 annually. The average cost of upkeep is highest in Los Angeles and Chicago, totaling $8,639 and $7,722 respectively. Meanwhile, homeowners in Las Vegas can expect to pay just $3,467 per year to maintain their homes.
"Just like you would visit a mechanic for regular tune-ups to help keep your car in good condition and avoid big bills, your home needs the same routine maintenance to ensure that everything is running smoothly," said David Steckel, Thumbtack's home expert. "Staying on top of annual home maintenance will not only increase the value of your home, but will also help prevent emergency repairs that can wreck a homeowner's budget."
"Understanding all the costs that come with homeownership can not only impact a buyer's budget, but the type of home they shop for, too," said Zillow home trends expert Amanda Pendleton. "While a big backyard or a larger home may be appealing, it's important to consider how much maintaining those spaces could cost. Buyers may want to consider affordable alternatives to single-family homes, or spend more upfront on a new-construction home that could need less maintenance in the near term."