The True Cost of Homeownership in 2025
Buying a home is often the largest single expense most people will ever undertake. However, many new homeowners are surprised to discover that after receiving the keys, the costs continue to accumulate, totaling a substantial sum. According to Bankrate’s Hidden Costs of Homeownership Study, the average annual costs associated with owning and maintaining a typical single-family home in the U.S. amount to $21,400 in 2025.
Why Homeownership Costs Are Rising
The cost of homeownership in the U.S. has increased in recent years due to inflation, rising interest rates, and a competitive housing market. The median home price stood at $437,942 as of April 2025, up 44% from 2020. Higher home values result in increased property taxes and homeowners insurance premiums. For instance, property taxes for single-family residences have risen by an average of 27% from 2019 to 2024.
Breakdown of Hidden Costs
- Home Maintenance: Averaging $8,808 annually, this is the largest component of hidden homeownership costs.
- Utilities/Energy: Costs average $4,494 per year.
- Property Taxes: Average $4,316 annually.
- Homeowners Insurance: $2,267 per year on average.
- Internet/Cable: Average cost is $1,515 annually.
States with the Highest and Lowest Homeownership Costs
The top five states with the highest hidden homeownership costs are Hawaii ($34,573), California ($32,262), New Jersey ($29,751), Massachusetts ($29,277), and Washington ($27,444). In contrast, the states with the lowest costs are West Virginia ($12,579), Mississippi ($14,810), Indiana ($14,903), Missouri ($15,349), and Arkansas ($15,362).
Regional Trends
East and West Coast states tend to have higher hidden costs due to high home values and steep property taxes. Southern and Midwestern states generally have lower costs due to lower housing prices and utility bills.
The Impact of Aging Housing Stock
The median age of American homes is over 40 years, leading to increased maintenance and repair costs. Year-over-year spending on home renovation and repair is predicted to reach $526 billion by the first quarter of 2026.
Conclusion
Homeownership comes with significant ongoing expenses beyond the initial purchase price and mortgage payments. Understanding these hidden costs is crucial for prospective homeowners to budget accurately and make informed decisions.
