“Invisible” costs are quietly crushing American homeowners

Mortgage rates and down payments aren’t the only barriers to homeownership.

A growing list of “hidden” expenses is adding tens of thousands of dollars a year to the cost of property ownership, making it harder for many Americans to afford staying in their homes.

A new report from Zillow and Thumbtack found that homeowners now spend nearly $16,000 a year on non-mortgage expenses, with roughly $11,000 going toward maintenance and the rest comprising insurance and property taxes.

That translates to an additional $1,325 per month, in addition to mortgage payments.

“Home maintenance is often one of the most overlooked parts of owning a home when it comes to budgeting for the year,” said Thumbtack home expert Morgan Olsen, who recommended that homeowners spend a little each season on preventative measures.

Perhaps the most striking finding is that homeowners’ insurance premiums have increased 48% since 2020, rising far faster than household incomes and even outpacing overall inflation over the same period.

While the findings surprised many analysts, they align with 2024 research from InvestorsObserver, which found that the cumulative cost of homeownership is 24% higher than renting, partly due to rising maintenance expenses.

The study, which examined more than two decades of homeownership data, concluded that maintenance alone accounts for over 21% of total homeownership costs.

Combined with their other costs, homeowners actually spent more on their properties than they received in return, with their accumulated equity falling $77,000 short of total expenses over the two decades.

Is it really true?

Some housing experts have expressed skepticism about the Zillow and Thumbtack figures, noting that the reported maintenance costs seem unusually high.

Residential Club co-founder Lance Lambert questioned the numbers outright. “Anecdotally — and I don’t want to jinx it — but I’ve never come anywhere close to that,” he wrote.

Amy Nixon, a Dallas-based housing and economic analyst, shared a similar experience: “In seven years of ownership, I don’t think we ever spent more than $5,000 in a single year on maintenance, and most years it was less than $2,000.”

While maintenance costs vary widely from one property to another, older homes — particularly those 20 years or older — can easily exceed these averages, especially when multiple major systems begin to fail simultaneously.

A roof or HVAC replacement alone can cost tens of thousands of dollars, and additional expenses, such as water heater replacements, plumbing repairs, or electrical upgrades, can add thousands more.

The strain is even greater for larger homes, which have become more common in the U.S. as average home sizes have steadily increased.