🏡💰 What is the actual cost of homeownership in 2023? 💰🏡
On top of the mortgage, the average homeowner in 2023 pays $17,459 annually for expenses such as maintenance, taxes, and other fees.
Home Buyer’s Remorse | Most Common Regrets | Stress of Homeownership | Cost of Home Maintenance | Cost of Home Renovations | Biggest Hidden Cost of Homeownership | Cost of Property Taxes and Insurance | Inflation and Homeownership
With mortgage rates still hovering around a 20-year high, homeownership remains out of reach for many potential home buyers. But current homeowners, perhaps less visibly, are also feeling the pain of expensive housing costs.
Entering 2023, the true cost of owning a home is climbing quickly. In addition to their mortgage payments, the average U.S. homeowner spends $17,459 annually on hidden costs. Those costs include:
- $4,975 for utilities
- $4,283 for maintenance
- $3,890 for home improvements
- $2,795 for property taxes
- $1,516 for homeowners insurance
Given an extra $17,500 in annual expenses, about 90% of homeowners say the true cost of owning a home is higher than they originally expected.
Additionally, an astonishing 73% of homeowners say they have regrets about their home purchase, according to new data from a Real Estate Witch survey of 1,000 homeowners.
The survey found that 65% of homeowners have some form of buyer’s remorse, including 71% of those who bought during the pandemic.
To better understand the cost of owning a home, Real Estate Witch asked homeowners about their expenses, finances, and opinions on homeownership. Here’s what we learned.
Key Statistics: The True Cost of Owning a Home 💸
- The average homeowner spends $17,459 on their home each year — in addition to mortgage payments.
- 65% of homeowners report feeling buyer’s remorse, up from 35% in 2019. Jump to section 👇
- 73% of homeowners have regrets about their home purchase. 👇
- First-time buyers are 15% more likely to have regrets than repeat buyers.
- 53% of homeowners find owning a home stressful. 👇
- 26% of homeowners — and 35% of those who own fixer-uppers — say their home negatively affects their mental health.
- The average homeowner spends $4,283 a year on maintenance and upkeep. 👇
- 34% of homeowners say the seller was not upfront about how much maintenance the home required.
- The most expensive hidden cost of homeownership is the price of utilities. Homeowners spend $4,975 on utilities each year — nearly 2x more than renters ($2,845).👇
- 90% of homeowners say some aspect of owning their home was more expensive than they originally expected. 👇
- 85% of homeowners say inflation has impacted the cost of owning their home. 👇
- 54% of homeowners could not afford a $3,000 emergency repair without going into credit card debt.
2 in 3 Homeowners Have Buyer’s Remorse
Deciding to buy a home is a serious commitment, especially with prices climbing rapidly over the past few years. Unfortunately, many buyers feel less confident about their purchase in hindsight.
About 65% of homeowners say they feel some level of buyer’s remorse, up from 35% in 2019.
Homeowners in 2023 say:
- They often feel home buyer’s remorse (14%).
- They sometimes feel home buyer’s remorse (26%).
- They rarely feel home buyer’s remorse (26%).
- They never feel home buyer’s remorse (35%).
Facing steeper prices, recent home buyers are even more likely to feel buyer’s remorse. About 71% of those who purchased a home during the pandemic (2020 or later) report feeling some form of remorse, compared to 62% of those who bought before 2020.
Additionally, townhouse owners are about 10% more likely than condo owners and 5% more likely than single-family homeowners to report feeling buyer’s remorse.
With the benefit of hindsight, 57% of homeowners say they would have approached buying a house differently had they realized the true cost of homeownership.
Of that group, the most common things they would’ve done differently are:
- They would’ve purchased a home that requires less maintenance (42%).
- They would’ve negotiated a better price or contingencies on their home (33%).
- They would’ve purchased a less expensive home (29%).
- They would’ve waited to buy a home (27%).
Nearly 3 in 4 Homeowners Have Regrets About Their Home Purchase
It’s increasingly rare for homeowners to feel like they landed the perfect house. About three-quarters of homeowners (73%) have regrets about their home.
For the second year in a row, homeowners’ most common regret is that their house requires too much maintenance.
Of those with regrets, the top 10 most common are:
- Their home requires too much maintenance (26%).
- They were unprepared for hidden costs (23%).
- Their home is too small or lacks features they need (22%).
- They bought a fixer-upper or older home (20%).
- The location is not ideal (18%).
- Their monthly mortgage payments are too high (16%).
- They dislike their neighbors (16%).
- Their interest rate is too high (16%).
- Their home was too expensive (15%).
- They didn’t ask enough questions/complete enough research before buying (13%).
It’s worth noting that certain types of home buyers are more likely to report regrets than others. First-time buyers are 15% more likely to have regrets than repeat buyers.
Meanwhile, about 23% of buyers say they did not schedule a home inspection before closing, and those buyers are 11% more likely to report regrets than those who arranged an inspection.
1 in 4 Say Homeownership Negatively Affects Their Mental Health
Although 91% of homeowners say they’re proud to own a home, they’re willing to admit that homeownership comes with a great deal of stress and responsibility.
That’s especially true for those who bought homes requiring significant maintenance. Fixer-upper owners are 67% more likely than other homeowners to say their house has negatively affected their mental health.
As a whole, homeowners say owning a home is:
- Stressful (53%)
- Too expensive (50%)
- Harder than renting (48%)
- Not attainable for the average American (40%)
- Negatively affecting their mental health (26%)
- Not worth the hassle (22%)
The Average Homeowner Spends Over $4,200 a Year on Maintenance
High maintenance costs are one of the most unpleasant surprises new homeowners encounter. About 34% of homeowners say the seller was not upfront about the cost of maintenance their home requires.
In fact, just under 1 in 5 homeowners (18%) say their home isn’t worth the amount they spend on maintenance. Another 1 in 7 (14%) say they simply can’t afford basic home maintenance.
Home maintenance is no small expense. The average homeowner reports spending a staggering $4,283 on maintenance in the past year, and 16% spent more than $10,000.
It’s natural to wonder what homeowners are spending all that money on. Although prices of construction materials, such as lumber, have declined following sharp pandemic surges, the cost of labor has continued to climb.
About 97% of homeowners have performed at least some maintenance work on their home — the most common of which is painting/staining (55%) and plumbing work (48%).
The most common types of maintenance and repair tasks involve:
- Painting and/or staining (55%)
- Plumbing (e.g., leaky faucet) (48%)
- Major appliance replacement (42%)
- Water heater issues (39%)
- Roof issues (37%)
- Electrical issues (36%)
- Major appliance repair (32%)
- HVAC issues (e.g., furnace/air conditioning) (31%)
- Gutter issues (27%)
- Deck repair (25%)
- Sewer/water line issues (20%)
Many homeowners really hate maintenance. About 71% of homeowners say they’d rather pay for a more expensive house with fewer maintenance issues than a less expensive house with more maintenance issues.
Homeowners Spend About 200 Hours on Maintenance and Improvements Annually
The cost of owning a home isn’t only a matter of money — it also eats up much of homeowners’ free time.
The average homeowner spends 17.1 hours each month — 205 hours a year — dealing with home repairs and improvements. There goes the weekend.
Homeowners trying to save money by doing repairs and renovations on their own may only be costing themselves more money in the long run. More than one-third of homeowners (36%) say they’ve had a DIY home renovation or repair disaster.
Renovating and Remodeling Adds $3,900 to Homeowners’ Annual Costs
One of the underrated costs of owning a home is the amount many spend on home improvements and renovations. Anyone who’s upgraded a kitchen or bathroom knows just how expensive such remodeling efforts can become.
The average homeowner reports spending a whopping $3,890 on renovations and remodeling in the past year alone. That’s in line with a new report from Harvard’s Joint Center for Housing Studies, which estimates the cost at $4,000.
The Most Popular Home Renovations
About 95% of homeowners say they plan to take on some sort of major home improvement project over the next five years. About one-third are planning a kitchen (34%) or bathroom (33%) remodel, which often cost over $20,000 and $10,000, respectively.
The 12 most common home renovations being planned include:
- Painting (47%)
- Kitchen remodel (34%)
- Bathroom remodel (33%)
- New landscaping, fencing, and/or yard improvements (33%)
- New windows (28%)
- New or refinished flooring (28%)
- Bedroom or living room remodel (24%)
- New or refinished patio, deck, and/or porch (23%)
- Adding a room (14%)
- Basement remodel (14%)
- Adding a bathroom (12%)
- Pool installation (12%)
Many homeowners, however, might find that their eyes are bigger than their budgets. Although 95% are planning major improvement projects, only 50% say they can afford them at the moment.
About 42% of homeowners say they pay for renovations and repairs mostly by borrowing, whether it’s from a loan, credit card, friend, or family member.
Homeowners primarily pay for upkeep and improvements using:
- Savings (36%)
- Credit card(s) (25%)
- Debit card(s) (19%)
- Personal loan (7%)
- Home equity loan or line of credit/cash-out refinance (6%)
- Support from family/friends (4%)
The Most Expensive Hidden Cost of Homeownership: Utility Payments
Anyone planning to buy a home needs to know about the biggest surprise cost of homeownership: utility bills. Nearly 3 in 10 homeowners (27%) say the cost of utilities is higher than they thought it would be before buying.
The average U.S. homeowner spends $4,975 annually on utilities such as electricity, water, cooling, and heating, according to the latest data from the Bureau of Labor Statistics.
That’s nearly 2x what renters pay annually ($2,845), as houses are generally larger and require more resources and energy.
90% Say Owning a Home Is More Expensive Than Expected, Especially With Taxes and Insurance
In addition to maintenance, upgrades, and utilities, two of the largest expenses homeowners face are property taxes and homeowners insurance. The typical owner spends $2,795 on property taxes and another $1,516 on homeowners insurance each year — a combined total of $4,311.
When asked which costs of homeownership are higher than they anticipated, the most common answer from homeowners was property taxes (33%), followed by renovations (27%), utilities (27%), and roof work (25%).
In all, 90% of homeowners say some aspect of homeownership has been more expensive than they expected.
Homeowners are most likely to be caught off guard by the cost of:
- Property taxes (33%)
- Making renovations (27%)
- Utilities (27%)
- Roof work (25%)
- Maintaining the home’s appearance (24%)
- Homeowners insurance (23%)
- Appliance repairs (22%)
- Upgrading appliances (21%)
- HVAC (furnace/air conditioning) (21%)
- Yard work (19%)
- Home cleaning (16%)
- Foundation repairs (15%)
- HOA fees (11%)
Just 10% say no costs have been higher than expected.
Average Cost of Property Taxes and Homeowners Insurance
Although home prices aren’t rising as fast as they were earlier in the pandemic, the increase in home values ballooned many homeowners’ property tax assessments. The average annual residential property tax payment is $2,795 — 8% higher than the previous year, according to U.S. Census data.
Property taxes are highest in New Jersey. Averaging $8,796, they are 13x more expensive than Alabama’s average of $674, the cheapest of any state.
Homeowners insurance prices, however, haven’t increased to the same extent as property taxes. A 2023 analysis from Value Penguin shows Colorado residents have the highest insurance costs at about $2,900 each year — 4x more than the average Vermont homeowner pays ($680).
|State||Average annual property tax cost||Average annual homeowners insurance cost||Total|
85% of Homeowners Say Inflation Has Impacted the Real Cost of Homeownership
Inflation affects more than just gas and groceries. Utility prices and other costs have made a noticeable dent in homeowners’ finances over the past year.
Nearly 9 in 10 homeowners (85%) say inflation has impacted the cost of homeownership, including 35% who say it has had a major impact.
Rising prices are stretching homeowners thin, threatening to land those without home warranty plans in trouble if faced with an unexpected bill. More than half of homeowners say they wouldn’t be able to afford a $3,000 emergency repair without going into credit card debt.
The financial squeeze of inflation and the shockingly high cost of owning a home may be why 36% of homeowners plan to sell their house in the next five years.
The Bright Side of Homeownership
At a time when 73% of homeowners have regrets — 32% outright say they overpaid for their home — it’s easy to focus on the costs and inconveniences of homeownership.
Despite their doubts, most homeowners still see silver linings. In addition to the wealth-building benefits of homeownership, about 91% of homeowners say owning a home makes them proud, and 81% say homeownership is part of the American dream.
Many also walk away from the home-buying process with positive impressions of the people around them. Homeowners have a positive opinion of their neighbors by a margin of 59% to 11% and a positive opinion of real estate agents by a margin of 48% to 8%.
The proprietary data featured in this study comes from an online survey commissioned by Real Estate Witch. One thousand U.S. homeowners were surveyed Feb. 2, 2023. Each respondent answered 20 questions related to their homeownership and financial situation.
Are you a member of the media interested in learning more about our research? Feel free to reach out! Contact this article’s author here.
About Real Estate Witch
You shouldn’t need a crystal ball or magical powers to understand real estate. Since 2016, Real Estate Witch has demystified real estate through in-depth guides, honest company reviews, and data-driven research. In 2020, Real Estate Witch was acquired by Clever Real Estate, a free agent-matching service that has helped consumers save more than $160 million on real estate fees. Real Estate Witch’s research has been featured in CNBC, Yahoo! Finance, Chicago Tribune, Black Enterprise, and more.
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Frequently Asked Questions About the Cost of Owning a Home
What is the total cost of homeownership?
In addition to mortgage payments, the average U.S. homeowner pays $17,459 a year for hidden expenses, such as repairs, renovations, utilities, taxes, and insurance. Learn more.
What are the unexpected costs of homeownership?
The cost that surprises the most homeowners is the amount they have to pay in property taxes, which cost an average of $2,795 annually. Learn more.
What is the average cost of maintenance on a home?
In 2023, the average homeowner spends $4,283 on maintenance and upkeep each year. The average time commitment is 17 hours each month. Learn more.
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