Hidden costs of homeownership jump, squeezing buyers as insurance, maintenance and taxes soar
The true cost of owning a U.S. home now averages more than $21,000 annually beyond the mortgage, driven by rising insurance, property taxes and routine maintenance — a squeeze hitting first-time buyers and stretching household budgets nationwide.
- Average hidden costs (2025): $21,400 per year beyond mortgage, per Bankrate’s 2025 study.
- Insurance spike: Homeowners insurance up ~48% since 2020; national average about $2,267 annually (LiveNOW from FOX).
- Maintenance leads: Routine maintenance averages $8,808 per year nationwide (Bankrate).
- State gaps matter: Highest totals in Hawaii and California; lowest in West Virginia and Mississippi (Bankrate).
Insurance spike: homeowners insurance increase is hitting budgets
Homeowners insurance has jumped sharply over the past five years. On average, premiums are up about 48% since 2020, pushing the national average to roughly $2,267 a year — adding hundreds of dollars beyond typical mortgage costs (LiveNOW from FOX).
Why the increase? Experts point to:
- More frequent severe weather events
- Higher rebuilding and construction costs after disasters
- Rising property values increasing replacement estimates
- Inflation in materials and labor
For homeowners in wildfire-, flood- or hurricane-prone areas, premiums have climbed faster and coverage can be harder to find.
“The combination of higher deductibles and increased premiums erodes the safety net many families count on.”
Maintenance costs outpace expectations
Routine maintenance is the largest single component of the so-called hidden costs. Bankrate’s 2025 study shows routine maintenance averages $8,808 per year nationwide (Bankrate).
What maintenance covers: HVAC servicing, roof and gutter repairs, pest control, lawn and irrigation care, appliance replacement and unexpected fixes (water damage, foundation, plumbing). In high-cost states and harsher climates, maintenance can exceed $17,000–$19,000 annually in places like Hawaii and California (Bankrate).
Property taxes and wide state gaps
Property taxes average about $4,316 nationally, but vary widely by state. For example, California homeowners average $7,378, while West Virginia averages $1,063 — reflecting differences in tax rates and home values (Bankrate).
Even without rate changes, rising assessed values can push tax bills higher over time, increasing annual ownership costs and hitting fixed-income households and first-time buyers especially hard.
Utilities, internet and other recurring bills
Beyond insurance, taxes and maintenance, recurring services add roughly $6,000 a year: utilities/energy (~$4,494) plus internet/cable (~$1,515) per Bankrate. These costs fluctuate with energy prices, local fees and extreme weather.
State-level disparities: where costs are highest and lowest
Bankrate’s analysis shows the highest total hidden costs in Hawaii ($34,573), California (over $30,000) and Washington. The lowest totals appear in states such as West Virginia ($12,579) and Mississippi (Bankrate).
Drivers include local property values, tax systems, climate risks and utility costs. In high-cost states, insurance and maintenance dominate; in lower-cost states, taxes and utilities may be bigger factors.
Impact on first-time buyers and household budgets
The surge in hidden costs is squeezing buyers. Many first-time homeowners only budget for down payments and monthly mortgages and do not plan for the $21,400 average in extra annual costs. That gap can lead to strained budgets, depleted savings or deferred maintenance that becomes more expensive later (Bankrate).
Research also shows homeowners spend about seven hours a week on maintenance, and 27% report upkeep feels overwhelming — translating to either time costs or extra expenses for hired help (American Home Shield; LiveNOW from FOX).
Methodology and data sources
This report primarily uses Bankrate’s 2025 Hidden Costs of Homeownership Study, which compiles and adjusts property tax, insurance, maintenance, utilities and cable/internet numbers for inflation and regional differences. The homeowners insurance trend is corroborated by reporting from LiveNOW from FOX and analysis by Fox Business. Time-use and sentiment data come from an American Home Shield homeowner survey.
Implications for Utah
Economic impact: Utah homeowners face the national trends with local twists. Property taxes in Utah tend to be lower than national averages, but strong home-price growth can raise assessed values and future tax bills. Maintenance and insurance increases add pressure even where taxes are moderate (Bankrate).
Insurance in Utah: Risk of floods or wildfires in parts of the state can drive up premiums. Residents should expect higher bills and consider shopping the market annually to compare rates (LiveNOW from FOX).
Local government & tax policy: With rising hidden costs, local debate may focus on tax credits for seniors, caps on assessment increases, or other targeted reforms to shield vulnerable households.
Housing affordability: First-time buyers in Utah — especially in Salt Lake County and the Wasatch Front — may need larger buffers for the added annual costs, potentially cooling demand or pushing some toward renting.
Practical steps for Utah homeowners
- Budget realism: Build maintenance, insurance and tax estimates into monthly budgets. Use Bankrate as a baseline and adjust for local prices.
- Shop insurance: Compare insurers yearly; consider bundling or adjusting deductibles carefully (LiveNOW from FOX).
- Preventive maintenance: Seasonal HVAC checks, roof inspections and routine care can reduce the chance of large, costly repairs.
- Engage local officials: Ask county assessors and city councils for transparency on assessments, tax rates and exemptions that affect your bill.
