Mia Taylor, Bankrate.com
Your home is not one of the biggest purchases you probably make. This can also be an ongoing cost or a source of cost. Of course, you know about your mortgage payments. But in addition to them there are regular costs of maintenance and maintenance.
Some of these are obvious and encountered in everyday life – housekeeping, mowing the lawn, window cleaning. Others include financial matters such as property taxes, utility bills, and homeowner insurance. And there are wear and tear repairs and unexpected fixes, and it is not very obvious to the naked eye until there is an inspection or break. The point is that they all drive tabs associated with homeownership.
According to a Bankrate Homeowner Regret Research, the biggest reason for homeowners who regret buying a home is that their maintenance and other unexpected home-related costs are higher than expected, with the biggest reason expressed in 40%.
Home maintenance costs
One of the biggest costs of owning a home is maintenance and daily maintenance costs. Maintenance includes obvious and less obvious.
The obvious home maintenance costs are invisible items and often affect the curb appeal of a home, such as:
– Lawn care, such as cutting, weeding, watering, etc.
– Sign: Keeps paint fresh and siding in good condition
– Intermediate care: Keep your home clean and wash your windows
– Landscape, both “hard” (structural items such as patios and decks) and “soft” such as vegetation and gardens
Hidden costs are projects that you haven’t seen until you need them or can’t spend much time on. They are:
– Plague prevention
– Clean the rain drains
– Representation of HVAC, wiring, or plumbing systems
– Roof repair
Other continuous maintenance costs
If you live in a homeowner’s association (HOA) neighborhood, you may need to pay a monthly, quarterly, or annually HOA fee that you can charge. According to the latest Census Bureau’s U.S. Housing Survey Data, the average national HOA fee is $243 per month, or $2,916 per year. However, depending on where you live and the association, HOA fees can reach thousands of dollars a year, especially if they include a large, one-off, special rating. HOA costs have been steadily increasing for homeowners these days.
Don’t forget to include your homeowner’s insurance when you add up the cost of owning your home. Most mortgage lenders require you to carry a certain amount of homeowner insurance to protect the value of your home, but insurance policies also protect you. When a covered event occurs, you can rely on insurance payments to help you do the repairs rather than paying all your expenses out of your pocket.
The national average cost is just over $2,000 a year with a $300,000 policy, but of course, coverage and premiums vary widely depending on the value and location of your home. Certainly, the cost of coverage across the country has skyrocketed as extreme weather and increased frequency of natural disasters increased the need for rebuilding and repair. Generally speaking, if you want to save money with premiums, you can increase your deductible.
More than one in four of our homeowners (26%) say they are not prepared for the potential costs associated with extreme weather events in the area. Additionally, more than two (43%) of the five homeowners have done nothing to protect their property from extreme weather damage within the past five years (source: Bankrate Extreme Weather Survey).
Property Tax and Utilities
Property tax is determined by the effective tax rate for your city or county and the value of your home. This may be assessed based on the fair market value of the region or individually assessed value. According to the American Community Survey, the current US property tax bill is $3,057 per year. However, there are also property tax bills as home prices have skyrocketed in many markets across the country in recent years. Depending on your city or county, these invoices may be paid monthly. Alternatively, you may be billed every year or twice a year. If you have a mortgage, it is often collected as part of your monthly payment.
Utility bills are increasingly expensive costs associated with homeownership. In fact, they are often the largest single cost. The utility bill for the average American household includes cell phones and internet costs, along with electricity, gas and water. Of these costs, mobile phone bills are the most expensive, averageing around $1,884 per year.
Energy prices in particular have risen over a decade amid a variety of pressures, including general inflation, increased energy demand, and costs associated with extreme weather conditions. They are consistently one of the biggest winners of the consumer price index. CPI shows, for example, that as of March 2025, energy services had risen 4.2% year-on-year.
Where is homeownership at a high level?
Overall, the various costs of homeownership are around $24,529 a year or $2,044 a month in addition to mortgage payments, plus a recent study from home seller/agent match site Clever Real Estate. But that’s the national average. This total varies by thousands of dollars depending on where you live, starting from $30,000 on Hawaii and the West Coast to just over $11,000 in some southern states. Since 2020, the average annual cost of owning and maintaining a home in the US has increased dramatically, up 26% as of 2024, according to the hidden costs of Bankrate’s homeownership research.
Naturally, the more affordable urban housing real estate, the more affordable the maintenance costs tend to be.
How to budget homeownership costs
Once you know all the costs of owning a home, it’s important to create a budget. Some expenses, such as homeowner insurance, HOA fees, and property taxes, may allow you to include regular line items in your budget. If you have a mortgage, you may be able to include them in your payments.
Understanding ongoing maintenance costs and future repairs can be a little difficult. One of the proposals offered by American Family Insurance is to secure approximately 1% of the value of your home each year for maintenance and repairs. Other insurers such as State Farm recommend up to 4%.
For example, if your home is worth $375,000, and if it’s the current average home value in the US, you’d like to budget about $3,750 a year. You can break it down into monthly budget items of $312.50 a month and keep your money in a high-yield savings account until you need it.
Measuring your repair budget can be more difficult. If you are purchasing a fixer upper, the home inspection report can provide you with ideas on how much you have a budget for repairs and upgrades.
You can also build emergency funds to help you pay for home repairs and maintenance. Many people find it helpful to have another savings account due to the unexpected cost of owning a home.
Emergency preparation
Unlike maintenance costs, home repairs can be the result of a natural disaster or a major system failure. Depending on the situation, you may be able to get help from the homeowner’s insurance, but major issues such as termite intrusions and tree branches falling on the roof create a need for repairs. Other issues such as flooding and water damage can erode the foundation of your home and require serious repairs.
Given the increasing frequency of natural disasters and extreme weather events, it is important to prepare for emergencies or unexpected costs. About 83% of homeowners had to deal with unexpected repairs in 2024, starting from 36% who faced similar predicaments in 2024, according to the insurance company’s annual domestic report. Homeowners faced unexpected repairs last year, dealing with issues primarily related to flooding, roof damage and window and door issues.
Hippo says that while almost half of homeowners have developed a 2025 emergency plan to address some of the uncertainties surrounding emergency housing costs, 42% say they are reevaluating their home insurance. Also, about 30% have added coverage to ensure that they are properly protected.
If you don’t have savings to cover the costs of your emergency expenses, or if you don’t want to drain all the cash on hand, another option is to use stocks in your household. Here’s how to do that:
– Home Equity Loan
– Home Equity Credit (HELOC)
– Cash-out refinance
– Reverse mortgage (for homeowners over 55)
Using your accumulated ownership at home will help you cover your emergency expenses and by going this route you can avoid sudden interest rates associated with personal loans and credit cards.
Repairs that lead to renovation
After embarking on emergency repairs, homeowners often choose to have a full-scale replacement or renovation. It can have more economical significance in the long term to upgrade than continuing to patch. Even if repairs don’t cause a project, wise improvements are an investment that will help ensure that your home will not only retain its value, but will appreciate it over time.
Especially in the past few years, renovations have been particularly popular among American homeowners who want to avoid sudden home purchase prices and mortgage interest rates involved in moving to a new home.
However, as well as substantial expenses, it is best to know which renovations provide the most return on investment (ROI). For example, some of the most popular home improvements, such as kitchen updates and bathroom remodels, can be extremely costly. But they can also enhance the value of your home and provide a good ROI if you don’t go overboard with luxurious features and fixtures.
There are many ways to pay for a home renovation project. Most homeowners choose to use their savings, while others prefer to raise funds. In fact, more than half (55%) of homeowners cite home repairs or improvements as a good reason to tap on build-up home equity.
In fact, remodeling is the most common use of home equity financing. According to the National Association of Realtors’ 2025 Remodeling Impact Report, half of consumers (54%) used their home equity loans/credit lines to pay for their projects.
Again, it is important to research options in advance and understand the pros and cons of each option. Using savings can avoid interest charges, but you run out of cash on hand. Meanwhile, fundraising allows you to start your project immediately and keep savings for other needs.
©2025 Bankrate.com. Distributed by Tribune Content Agency, LLC.
Original release: May 2, 2025 10am EDT
