How Much Does It Really Cost to Own a Home?

As the adage says, there’s no free lunch, and that’s certainly true when it comes to homeownership. Renters seeking to transition to home ownership need to understand that a down payment and mortgage are just the beginning of the costs involved with the American dream. 

And the expenses that follow can be a tough lesson, particularly for many first-time homeowners to master. Even before they settle in, new homeowners—and others–face the cost to move, then, maybe paint and wallpaper, mow the lawn, plow the driveway and walks of snow in winter and replace aging parts and systems.

To make the learning curve tougher is that the everyday expenses of owning are now higher than ever, according to a new analysis from Zillow and Thumbtack. Specifically, utility bills, property taxes, insurance and essential home maintenance may add up to $14,000-plus a year for the average homeowner. That’s $1,180 per month on top of a typical mortgage payment.

Homeowners living in the more expensive metro areas will face greater costs, some topping $22,0000 annually in San Francisco, New York and Los Angeles, which took the top three spots on the list of top 10 metros with the highest hidden annual costs of homeownership. In contrast, there are places where costs are much less such as Las Vegas, $9,886; Asheville, N.C., $11,318; and St. Louis, $11,824.

Other cities that followed the top three in order of costs are Seattle/Tacoma, Boston, San Diego, Austin, Chicago, Miami/Ft. Lauderdale and Portland.

Property Taxes, Insurance 

The research from Zillow and Thumbtack found the biggest hidden costs to be property taxes, homeowners insurance and utility payments for energy, water, natural gas and the Internet. These averaged $7,742 altogether nationally.

When it comes to the property taxes, New Yorkers paid the most at $9,000 a year but Hartford was No. 1 for utilities, which averaged $4,443 a year. Homeowners insurance costs varied based on a home’s value, which helped homeowners in affordable metros of Pittsburgh and Cleveland to reap the benefit also of lower insurance bills.

Besides annual costs such as insurance, homeowners also face regular and emergency maintenance expenses. Such projects averaged a total of $6,413 annually with upkeep highest in LA and Chicago and climbed to $8,639 and $7,722 respectively. Those in Las Vegas, however, paid only $3,467 per year.

Of course, such estimations are exactly that—a possibility, based on averages. For the analysis utility costs were calculated using the unweighted average across all states, excluding streaming and phone bill costs. These may turn out to be very different depending on homeowner choices and local costs such as labor. For example, some homeowners may want to have their carpeting cleaned regularly, their HVAC system checked annually (good idea), their gutters cleaned twice a year in fall and spring (another good idea) and the exterior of their home pressure washed yearly and also before they paint. These tasks all can generate whopping fees.

What such analysis also should relay to newly minted homeowners is the importance of having a detailed annual and monthly budget to follow based on their resources and the age of their house and its systems and appliances. They also should have a good fund for emergencies that occur, and sometimes when least expected. An air conditioning system that a home inspector thought would last another five years may conk out sooner and need to be replaced or repaired as the temperature soars over 90 degrees.