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The Newer the Home, the Less Operational Costs for Homeowners

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Affordability

The Newer the Home, the Less Operational Costs for Homeowners


January 18, 2021
Parents swinging child in front of new home
Photo: LIGHTFIELD STUDIOS

Homes built within the last decade cost homeowners less to maintain and operate than homes built in the 2000s, according to data from the American Housing Survey. Operational costs include property taxes, insurance, maintenance, and utilities. On average, homeowners spend 5% of their home’s value on operational and maintenance costs, with property taxes being the bulk of spending. But the National Association of Home Builders says homes built after 2010 have operational costs of 3%. The actual cost varies from region to region, with the East South Central Division at the lowest end with an average spending cost of $6,270 per year while the average cost is $13,000 in New England.

This effect is primarily connected to taxes.

The largest component of operating costs are property taxes, accounting for just under $3,700, or 40% of the annual operating costs. Fuels – the second largest component of operating costs – average just over $2,500, or 27% of annual operating costs. Fuels include the costs of electricity, gas, oil or other fuel (wood, coal, kerosene, or other).

Home insurance is the next most expensive item on the operating costs list. On average, homeowners pay just over $1,250 to cover home insurance. In addition, homeowners spend close to $1,000 on maintenance – narrowly defined in the AHS as spending on minor routine repairs that do not include improvements and major repairs. Water and trash collection bills amount to $850, on average.

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