Hidden Costs of Homeownership Add to Affordability Challenges

Mortgage payments aren't the only cost homebuyers need to worry about. The costs associated with maintenance, insurance, and property taxes are also rising. According to a recent analysis from housing market platform Zillow, these hidden homeownership costs now total $15,979 per year. On average, homeowners spend $10,946 annually on maintenance, $2,003 on homeowners insurance, and another $3,030 on property taxes. Collectively, these costs add up to more than $1,300 per month on top of average mortgage payments. Over the past year, these expenses have increased by 4.7%, while household incomes increased by just 3.8%.

These costs are even higher in coastal parts of the U.S., where homeownership overall tends to be more expensive. Homeowners in New York City pay an average of $24,381 per year for added expenses, while those in San Francisco spend about $22,781 per year on added expenses, and in Boston, where that spending is about $21,320 annually.

Insurance premiums are among the fastest rising homeownership expenses. Nationwide, average premiums have increased 48 percent since early 2020 and now total just over $2,000 per year.

In parts of the country, the increases have been far steeper. Miami homeowners now pay an average of $4,607 annually, a 72 percent increase in five years. Similar jumps have occurred across Florida, with premiums up 72 percent in Jacksonville, 69 percent in Tampa, and 68 percent in Orlando. Outside the state, premiums have climbed 79 percent in New Orleans, 59 percent in Sacramento, 58 percent in Atlanta, and 56 percent in Riverside, California. These increases have far outpaced income growth, creating new challenges for first-time buyers and long-time owners alike.