When considering purchasing a home, it’s important to factor in the hidden costs that come with homeownership. A recent analysis by Bankrate found that the average hidden costs of owning a median-priced home in the United States amount to $1,510 per month, or $18,118 annually. These costs include property taxes, homeowners insurance, home maintenance expenses, as well as utility bills like electricity, internet, and cable. These costs have increased by 26% over the past four years, making it crucial for prospective homeowners to budget accordingly.
It’s essential for homebuyers to be aware of these hidden costs, as they can have a significant impact on their overall finances. Failure to account for these expenses can result in homeowners becoming “house poor,” spending all of their available funds on maintaining their home. While some online mortgage calculators include property taxes and insurance in their estimates, many do not factor in other hidden costs like repairs or utilities. Therefore, it’s critical for prospective buyers to do their own research and create a comprehensive budget to ensure they can afford homeownership.
Hidden home costs vary greatly by state, with states like Hawaii, California, and Massachusetts having some of the highest annual costs exceeding $26,000. On the other hand, states in the Southeast where home prices are lower, such as Kentucky, have average hidden costs as low as $11,559 per year. Bankrate’s analysis used a variety of data sources to calculate these costs, adjusting some amounts using the Consumer Price Index to project future expenses. It’s important to note that the study does not include additional hidden costs like private mortgage insurance, HOA fees, pest control, and closing costs, which could further add to the total expense of homeownership.
To provide a clearer picture of the average hidden costs in each state, Bankrate’s analysis breaks down the annual and monthly expenses for owning a single-family home across the country. For example, in Alabama, the average annual cost of hidden expenses is $12,258, while in California, it is $28,790. These costs include a range of expenses from property taxes to utilities, giving prospective buyers a better understanding of the financial commitment required for homeownership in different regions.
In order to navigate the complex landscape of hidden homeownership costs, individuals should consider taking a comprehensive online course like CNBC’s “Become an Effective Communicator: Master Public Speaking.” This course offers valuable insights on how to speak confidently, calm nerves, control body language, and make a great first impression, all of which can be beneficial in various aspects of life, including purchasing a home. Additionally, signing up for CNBC Make It’s newsletter can provide readers with further tips and tricks for success in the workplace, financial management, and personal development, helping individuals make informed decisions about homeownership and other aspects of their lives.
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