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5 Hidden Costs of Owning a Home You Need To Be Prepared For

With home prices rising, it's now more expensive than ever to buy a home. And unfortunately, a mortgage is just one of the costs that come along with being a homeowner. A new report by Clever found that the average American homeowner spends $15,405 each year on top of their mortgage. And that's a whopping $2,000 more than the average homeowner was spending just two years ago, when Clever last ran the study.

Here's a look at the hidden costs that comprise this high number, and why these costs have been increasing.

Utilities

For most homeowners, the largest expenses outside of their mortgage are their utility bills. The Clever study found that the average American homeowner now spends $4,829 annually on utilities.

"Utility costs are especially high due to people spending more time at home," said Matt Brannon, data writer at Clever Real Estate.

Home Improvements

The average homeowner spends $3,300 on home improvement projects each year, the report found. And although that's the average, many homeowners spend more. Nearly 1 in 5 homeowners (18%) spent at least $10,000 on improvements last year, up from 10% in 2019. And about one-third (32%) said they spent $5,000 or more last year.

Maintenance and Repairs

It typically takes thousands of dollars to keep a home in tip-top shape -- an average of $3,018 annually. And this doesn't include emergency repairs. Some of the most common home repairs include painting, major appliance repair and plumbing, and the most common maintenance tasks are pest control, landscaping and housekeeping.

"The average homeowner has seen maintenance costs increase by $342 since our 2019 survey," Brannon said.

Property Taxes

Depending on where you live, property taxes can be a major expense. On average, homeowners spend $2,578 each year on property taxes, the report found. But this number can be much higher in states with high property taxes. In New Jersey, which has the highest property taxes in the U.S., the average homeowner spends $8,400 each year.

Homeowners Insurance

Homeowners insurance costs also vary widely by state, but the national average is now $1,680. This marks a significant increase from 2019.

"The average annual cost for homeowners insurance went from $1,228 to $1,680," Brannon said.

Together, these hidden costs can be a major financial strain on many homeowners.

"Home improvement costs are up, maintenance costs are up, insurance costs are up and utility costs are especially high due to people spending more time at home," Brannon said. "For the average American, it's a very challenging time to own a home."

 

This article originally appeared on GOBankingRates.com: 5 Hidden Costs of Owning a Home You Need To Be Prepared For