Mortgage payments are the biggest-ticket item when consumers are looking at the expenses of owning a home. But a new analysis from Zillow and Thumbtack shows the average annual “hidden costs of homeownership” — including insurance, property taxes and maintenance costs — have climbed to nearly $16,000.
This increase has outpaced incomes and is straining affordability across the country, according to the analysis, which was released Thursday.
Since February 2020, home insurance premiums have risen 48% nationwide, costing more than $2,000 per year on a typical home. Florida has been hit particularly hard by insurance spikes, with Miami seeing premiums average $4,607 — up 72% in the past five years. Jacksonville has also seen a 72% rise, while premiums have increased 69% in Tampa and 68% in Orlando. New Orleans has seen insurance premiums jump 79%.
“Insurance costs are rising nearly twice as fast as homeowner incomes,” stated Kara Ng, Zillow senior economist. “It’s not just a budget line item. It’s a barrier to entry for aspiring first-time buyers and for families already stretched thin. Buyers who are already facing affordability challenges in today’s market need to understand and budget for these less obvious expenses when calculating how much home they can truly afford.”
The insurance costs were just one portion of the increase in expenses. Average property taxes nationwide are $3,030, and the average cost of home maintenance is $10,946, according to the report.
In the past year, those costs have increased 4.7%, while household incomes rose just 3.8%. Expensive coastal metropolitan areas are being hit hardest, with hidden homeownership costs reaching $24,381 in New York City, $22,781 in San Francisco and $21,320 in Boston.
For the analysis, Zillow estimated annual property tax and homeowners insurance costs for typical U.S. homeowners, then compared year-over-year changes and pre-pandemic benchmarks. Thumbtack added estimates for annual costs of home maintenance, plus preventive weather-related maintenance projects.
