The cost of homeownership in the U.S. is not just limited to purchasing a home, but also includes various hidden expenses that add up to an average of $18,118 annually according to a report by Bankrate.com. This total includes property taxes, homeowners insurance, utilities, and home maintenance. The national average for these hidden costs have significantly increased by 26% over the past four years, reaching $1,510 a month in 2024.
Maintenance and repair costs can be particularly surprising for new homeowners, as the age of the home can greatly impact the frequency and expenses of repairs. With older homes becoming more common due to limited new construction, buyers may need to consider additional costs for system upgrades such as HVAC units, windows, and doors. A home’s roof typically lasts about 30 years, while vinyl siding may last three to four decades, indicating the potential for significant long-term expenses.
First-time homebuyers may not fully understand the true cost of maintenance and repairs initially, as these expenses are often part of the learning process of homeownership. It is crucial for buyers to ensure they have a reserve of savings in place to cover unexpected repairs and maintenance costs to avoid becoming “house poor.” In 2023, many homeowners used a variety of methods to finance home improvement projects, including savings, credit cards, refinancing loans, and home equity lines of credit.
While some buyers may be tempted to waive a home inspection in competitive markets, this can be a risky decision that may lead to unforeseen maintenance issues after closing on a house. The increase in competition among buyers has led to some waiving home inspections, but this practice is not recommended by experts. An inspection can provide valuable insights into any potential maintenance tasks or repairs that may be necessary, helping buyers make informed decisions regarding their new home purchase.
Competition remains high in some areas of the housing market, with an average of three offers for every home listed for sale. Despite this competition, it is important for buyers to prioritize a home inspection to avoid potential financial risks associated with unforeseen maintenance issues. By understanding and preparing for the hidden costs of homeownership, buyers can make informed decisions and ensure their long-term financial stability.
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