Homeownership in the U.S. has become increasingly expensive over the years, and it’s not just the purchase price that’s on the rise. The hidden costs of maintaining a home have also seen a significant increase. According to a recent report by Bankrate.com, the average annual cost of owning a home comes to $18,118, or $1,510 a month. These costs include property taxes, homeowners insurance, utilities, and maintenance expenses, which are estimated at 2% of the home’s value annually. This figure represents a 26% increase compared to four years ago when the total hidden costs were $14,428 per year.
One of the biggest surprises for new homeowners is the unexpected maintenance and repair expenses that come with owning a home. The age of a home plays a significant role in determining these costs, as older homes often require more frequent and expensive repairs. With many homes on the market being several decades old, the need for upgrades and repairs is inevitable. HVAC units, windows, doors, roofs, and siding are just some of the costly components that may need attention. First-time homebuyers are especially caught off guard by the true cost of maintenance, as it is often a steep learning curve that comes with homeownership.
A common mistake that new homeowners make is underestimating the ongoing costs of maintenance and repairs. Many first-time buyers deplete their savings to cover the down payment, only to find themselves financially stretched once they move in and encounter unexpected repair expenses. This can lead to accumulating credit card debt or taking out high-interest loans to cover the costs. In some cases, homeowners are forced to tap into their savings or other financial resources to fund home improvement projects, adding to the overall financial strain of homeownership.
In a highly competitive market, many homebuyers opt to waive home inspections to make their offer more attractive, especially when facing stiff competition from other buyers. While this strategy may work for experienced homeowners or those with cash offers, it can be risky for first-time buyers who may not fully understand the potential maintenance issues lurking in a property. Waiving the home inspection raises the chances of moving into a house with hidden maintenance problems that can lead to costly repairs down the line.
Industry experts caution against skipping home inspections as a way to streamline the buying process. An inspection provides valuable information about the condition of a property and can help buyers anticipate future maintenance needs. Without this crucial step, homeowners risk facing unexpected repair costs and ongoing maintenance expenses that can strain their finances. Understanding the true cost of homeownership goes beyond the mortgage payment and requires careful planning, budgeting, and a realistic assessment of the hidden expenses that come with owning a home.