Zillow Homeownership Costs Report: The Hidden $16,000 Annual Expenses Every Buyer Must Know

Owning a home is one of the biggest achievements for many Americans. It represents stability, success, and the fulfillment of the American Dream. But behind the excitement of getting the keys to your own place lies a financial reality many people overlook: the real cost of owning a home is much higher than just your monthly mortgage payment.

A new Zillow Homeownership Costs Report reveals that the average U.S. homeowner spends almost $16,000 every year on hidden, non-mortgage expenses. These added costs play a major role in long-term affordability and should be understood before buying a home. Trending topics 

A Closer Look at Hidden Homeownership Costs

These extra expenses generally fall into three major categories: maintenance, homeowners insurance, and property taxes.

1. Maintenance Costs

Maintenance is by far the biggest portion. On average, homeowners spend $10,946 per year to keep their property in good condition. This includes:

• Lawn and exterior care

• Roof and structural repairs

• HVAC servicing

• Plumbing fixes

• General routine upkeep

These expenses are unpredictable and often expensive, making it difficult for many homeowners to plan ahead.

2. Homeowners Insurance

Insurance premiums have increased sharply — up 48% since February 2020. Today, the average homeowner pays $2,003 per year for insurance. The rise is largely due to:

• Higher construction and repair costs

• Increased frequency of storms and natural disasters

3. Property Taxes

Property taxes remain a consistent yearly responsibility, averaging $3,030 per home. These taxes help fund community essentials such as schools, roads, and emergency services, but they significantly add to the overall cost of owning a home.

How These Costs Affect Affordability

These hidden expenses are rising faster than household incomes. Over the past year, they increased 4.7%, while household income only rose 3.8%. This creates a widening affordability gap.

The situation is even more challenging in coastal metro areas:

• New York City: $24,381

• San Francisco: $22,781

• Boston: $21,320

For many families, these rising costs are putting pressure on budgets and reducing financial flexibility.

Zillow Senior Economist Orphe Divounguy explains:
“Homeownership is a crucial way Americans build wealth, but rising homeownership costs are making it harder for prospective buyers to save for a down payment and qualify for a mortgage.”

Costs Vary Across the Country

Hidden homeownership expenses differ depending on the region:

High-Tax States

New Jersey, Illinois, and Connecticut have some of the highest property tax rates in the country.

Disaster-Prone States

Florida and Louisiana face extremely high insurance premiums — often over $6,000 per year — due to hurricane and storm risks.

High-Maintenance Regions

Older homes in the Northeast often require more upkeep, while Southern states with newer homes may pay less in maintenance but more in utilities.

Tips for Buyers to Stay Prepared

If you're planning to buy a home, here’s how to manage these rising costs:

• Know Your Full Budget: Tools like Zillow’s BuyAbility can help estimate total monthly homeownership costs.

• Save for Maintenance Early: Set aside funds regularly, even if repairs aren’t needed right away.

• Compare Insurance Rates: Prices vary widely between providers, so shop around every year.

• Appeal Property Taxes: If your home is over-assessed, challenging it can reduce your tax bill.