These Everyday Expenses Cost Homeowners Over $14,000 per Year

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The top three expenses account for half of annual homeowner expenses. Here’s how to reduce your homeownership costs. 

After I bought my first home, I was shocked to discover how much routine maintenance went into keeping it up. A small leak in the roof led to minor drywall damage, an old sliding glass door — that neither slid nor could be seen through — needed replacing, and the worn carpet made worse by my dog led to new flooring for my living room.

Fortunately, my mortgage payment was low, so the repairs weren’t too much of a financial burden. But first-time home buyers are having a much more difficult time with homeownership expenses these days.

A Zillow and Thumbtack survey published earlier this year showed that everyday expenses — including utility bills, homeowners insurance, property taxes, and maintenance — cost the average homeowner a staggering $14,155 annually. And with the median home price up 29% over the past three years, new homeowners are facing a combination of pricey homes and extra expenses.

The most expensive homeownership costs

While there are many potential hidden costs that homeowners have to watch out for, Zillow and Thumbtack’s research highlighted three unavoidable expenses that account for more than half of the annual homeownership expenses.

The combination of property taxes, homeowners insurance, and utility bills cost homeowners an average of $7,742 annually. Unfortunately, there are two things listed here that you don’t have as much control over: property taxes and utility bills.

Your property taxes are based on the value of your home. And since home values have soared over the past few years, the average single-family property tax increased by 3% in 2022, up from a 1.8% increase in 2021, according to real estate research firm ATTOM Data Solutions.

One of the only options to lower your property taxes is to pay an appraiser to come to your home and assess it. If they value the house for less than your county or city does, you may be able to submit that information to lower your property taxes. But there’s no guarantee that it will work, and you’ll have to pay for the assessor with your own money, which may cost between $600 to $2,000, according to Rocket Mortgage.

As for utility bills, the only way to really reduce this expense is to adjust your thermostat so that you’re using less energy, turn out your lights more often, reduce your water usage, or install an alternative energy source like solar panels. Aside from changing your energy usage habits, utility rates are often fixed and can’t be negotiated.

Shop around for homeowners insurance

While there aren’t many options to lower your property taxes and utility bills, you may be able to significantly reduce your homeownership expenses by shopping around for cheaper homeowners insurance.

According to Consumer Reports, homeowners insurance premiums jumped 12.6% in 2022 and are on track to increase another 7.1% this year. Which means finding a better deal is more important than ever.

The first step is to determine how much insurance you need. You can do this by considering what level of property and liability coverage you want and any additional coverage you may need, like flood insurance. Talking with an insurance agent or browsing insurance websites will help you determine your ideal level of coverage.

Once you have an idea of the coverage level you want, spend some time evaluating different companies. Compare rates between companies that offer similar coverage, review their discounts, compare their deductibles, and take into account their customer reviews. If you’re buying a new home, you may want to consider a few companies that offer the best insurance for new construction homes.

Keep in mind that you can change insurance companies whenever you want to. If you just bought a house and think you’re paying too much for insurance, you can still shop around. And if you’ve been with a company for years but aren’t satisfied with its customer service or its prices, you’re free to find the best homeowners insurance company for you.

While some homeownership expenses can’t be lowered, you have some control over how much you’re paying for homeowners insurance. And with the cost of nearly everything being higher than just a few years ago, it’s worth seeing if you can lower your insurance bill.

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There are many homeowners insurance companies to choose from. We’ve researched dozens of options and short-listed our favorites here. Looking for a green build discount or easy bundle policies? Want an easy-to-use interface? Read our free expert review and get a quote today.

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