The cost of house ownership is rising by thousands of dollars due to rising rates for utilities, property taxes, and homeowners insurance. (Photo : by Mario Tama/Getty Images)
Rising utility rates, property taxes, and homeowners insurance costs are increasing the overall cost of homeownership by thousands of dollars, coinciding with record-high real estate prices and higher mortgage rates and closing costs.
A Bankrate study shows the average yearly cost of insurance, taxes, and utilities for a single-family home in the U.S. is now around $18,118, up from $14,428 in 2020, driven by higher property prices, construction costs, and insurance premiums due to climate-related events.
The 2024 home-buying season is hindered by record-high prices and mortgage rates near 7%, causing many buyers to remain renters and some homeowners to avoid selling due to the prospect of higher mortgage rates on new properties.
The cost of house ownership is rising by thousands of dollars due to rising rates for utilities, property taxes, and homeowners insurance. The hikes coincide with record-high real estate prices, as well as higher mortgage rates and closing costs.
According to a Bankrate research, the average yearly cost of insurance, taxes, and utilities for a single-family house in the United States is presently around $18,118. That's an increase from $14,428 in 2020, according to the personal finance page. According to Bankrate, there are a number of reasons why these expenses are increasing, including growing property prices, rising construction company costs, and rising homeowners insurance premiums as a result of climate-related natural catastrophes.
In April, some homeowners find it so difficult to pay their mortgages that they must sell their possessions, miss meals, or take on second jobs. For the four weeks that ended May 19, the country's median asking price for a home, what sellers hope their property goes for, reached a record $420,250, a 6.6% increase from a year earlier.
The 2024 house-buying season has been hampered thus far by record-high home prices and mortgage rates that are around 7%, with many purchasers choosing to stay renters. Some homeowners have also decided not to list their house on the market due to the higher mortgage rates they would have to pay on another property if they did.
Given the recent increases in property prices and mortgage rates, some purchasers may be inclined to hold off until those figures decline. However, waiting offers little to no benefit because the prices are unlikely to go down this summer.
According to a Bankrate poll, homeowners in coastal areas like California, Massachusetts, and Hawaii pay the highest prices. Hawaii also has the highest expenditures associated with property ownership nationwide.
The states with the highest hidden housing costs are Hawaii ($29,015 annually), California ($28,790), Massachusetts ($26,313), New Jersey ($25,573), and Connecticut ($23,515). Conversely, the states with the lowest additional homeownership costs are Kentucky ($11,559), Arkansas ($11,692), Mississippi ($11,881), Alabama ($12,259), and Indiana ($12,259).
To arrive at its conclusions, Bankrate added up the average cost of energy bills, homeowners insurance, property taxes, cable and internet subscriptions, and home maintenance costs from March 2020 to March 2024. Redfin, a U.S. company, provided raw data regarding such expenses to Bankrate analysts. The National Association of Insurance Commissioners, the Energy Information Administration, and ATTOM, a real estate data collector, also provided data.
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