Buying a home is a huge financial step, but the price you pay at closing is only part of what it costs to own one. Mortgage payments are just the beginning, and expenses like taxes, repairs, insurance, utilities, and upkeep can add up much faster than many buyers expect.
A recent study found that the average homeowner spends $33,451 per year on housing-related expenses, with annual costs exceeding $67,000 in some states. The analysis examined mortgage payments, property taxes, and estimated maintenance costs, showing how much the full cost of homeownership can differ from the price listed in the real estate listing.
Here are 10 homeownership costs that are easy to miss when putting together a budget.
1. Home Maintenance
A common rule of thumb is to set aside about 1% of your home’s value each year for maintenance, but many homeowners don’t realize how quickly those costs can pile up. HVAC service, roof repairs, appliance replacements, plumbing problems, and other routine work can take a serious bite out of your savings.
Related: 13 Homeowner Expenses That Sneak Up on You Every Year
2. Property Taxes
Property taxes are one of the highest recurring costs of owning a home, and the amount can vary a lot depending on where you live. The study found that New Jersey had the highest median annual property tax bill in the country, at nearly $10,000, making this expense a major part of the yearly housing bill.
3. Mortgage Payments
For most homeowners, the mortgage is the largest monthly expense, but buyers sometimes focus more on qualifying for the loan than on how the payment will fit into their long-term budget. The study found that annual mortgage costs exceeded $55,000 in Connecticut, making it the most expensive state for homeowners overall.
4. Homeowners Insurance
Homeowners insurance is usually required by mortgage lenders, but the premium you pay today may not stay the same for years to come. Inflation, severe weather, claims in your area, and higher rebuilding costs can all push premiums higher, so it pays to check your coverage and rates from time to time.
5. Utility Bills
Once you own a home, you’re responsible for bills such as electricity, gas, water, sewer, trash collection, and heating and cooling. Larger homes and older properties can use much more energy, which can make monthly utility costs higher than a buyer expected.
Related: You Bought the House. Now Come the Expenses Nobody Talks About
6. Lawn Care and Landscaping
A yard can come with plenty of expenses beyond mowing. Fertilizer, mulch, tree trimming, irrigation repairs, pest treatments, and seasonal planting can make routine yard care a sizable annual expense.
7. HOA Fees
If your home is part of a homeowners association, HOA dues need to be included in your regular housing budget. The fees may cover shared amenities, landscaping, or neighborhood upkeep, and they can increase over time.
8. Emergency Repairs
Even a well-maintained home can eventually spring a leak, lose a water heater, or suffer damage from a storm. Keeping money in an emergency fund can help cover these surprise bills without putting the expense on a high-interest credit card.
Related: 15 Homebuying mistakes that can create stress, regret, and unexpected expenses
9. Renovations and Upgrades
It’s common for homeowners to start thinking about kitchen remodels, bathroom updates, new flooring, or other projects after moving in. Small upgrades can cost more than expected, while larger renovations can quickly add thousands of dollars to the household budget.
10. Seasonal Maintenance
A house needs regular attention as the seasons change, and putting off small jobs can lead to bigger repair bills later. Cleaning gutters, servicing heating and cooling equipment, sealing windows, pressure washing, and winterizing outdoor plumbing are all tasks that can show up on your yearly to-do list.
