Key Takeaways
- U.S. homeownership costs jumped 26% since 2020, adding $1,510 monthly.
- Home maintenance and property taxes drove the highest cost increases.
- Utah experienced the highest surge at 44%, while Texas saw the lowest at 14%.
What Happened?
Homeownership costs in the U.S. have surged 26% since the pandemic began in 2020. The average annual cost of owning and maintaining a single-family home, excluding mortgage payments, reached $18,118 in March 2024.
This translates to an extra $1,510 per month compared to March 2020. Bankrate’s analysis, which used Redfin’s March median sales price of $436,291, factored in property taxes, home insurance, energy costs, internet, cable bills, and 2% of the sales price for maintenance.
Why It Matters?
For investors, this substantial rise in homeownership costs reflects broader economic trends, particularly the impact of inflation. Jeff Ostrowski, an analyst at Bankrate, highlighted the often-underestimated expenses of owning a home, including maintenance and property taxes. States with higher property prices saw the most significant increases in costs.
For instance, Utah experienced a staggering 44% rise, while Idaho and Hawaii saw 39% and 38% increases, respectively. These cost surges could influence housing market dynamics, affecting both buying and selling behaviors.
What’s Next?
Expect homeownership costs to continue rising, driven by persistent inflation and escalating property prices. Investors should monitor states with high property taxes and maintenance costs, as these areas could see more pronounced market shifts.
Ostrowski advises potential buyers to be over-prepared financially, suggesting the importance of having extra funds in high-yield savings accounts to cushion against unexpected expenses. As costs vary widely—from $11,559 annually in Kentucky to $29,015 in Hawaii—understanding regional differences will be crucial for making informed investment decisions.
Real Estate, Markets
Homeownership costs, Inflation, Property taxes
