The cost of purchasing a home has become increasingly out of reach for Americans since the Covid-19 pandemic, but it's not just the mortgage we have to worry about anymore. The cost of taxes, insurance, maintenance, energy, and even internet and cable, are all on the rise, leaving homeowners strapped for cash in the greatest economy ever.
A new Bankrate study shows the average yearly cost of owning and maintaining a single-family home is now over $18,000 — that's 26% higher than in 2020 when those same costs were just under $14,500.
Talk about the best economy ever!
The average annual cost of owning and maintaining a single-family home in the U.S. is 26% higher now compared to four years ago, according to Bankrate's new Hidden Costs of Homeownership Study. Bankrate calculated the average costs of property taxes, homeowners insurance, home maintenance costs and electricity, internet and cable bills and found that they add up to $18,118 a year for a typical single-family home (valued at $436,291 per Redfin) in all 50 states, not including the District of Columbia. Nationally, that is an additional $1,510 per month on top of a mortgage payment. In 2020, those same expenses totaled $14,428 annually for a typical single-family home, equivalent to $1,202 per month.
Home insurance is one of the main factors leading to this increase in home ownership costs.
From CNN:
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.
Inflation has also increased the price of maintenance, and this author is feeling this pain as we speak while he drains his savings account to pay for a new driveway.
Here's a quick look at how electricity rates have risen over the past few years:
So yeah, you homeowners who were lucky enough to lock in that 3% rate a few years ago probably wanna keep building that savings account to help you cover these increasing costs.
CNN calls this next bit a "silver lining."
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 swelled by 37% between 2019 to 2022, according to the Federal Reserve.
The real estate boom also gives homeowners additional financial flexibility, letting them borrow against the value of their homes to pay for unexpected costs, finance the cost of education or upgrade their homes.
Sure, my net worth is up, but so are my property taxes!!
Just another reason to celebrate the best economy ever!
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