5 Surprise Homeownership Expenses Buyers Often Miss After Closing

Many Americans zero in on mortgage payments when figuring out what it costs to own a home. Yet several overlooked expenses can add thousands of dollars to yearly housing costs. A recent Clever Real Estate study found that these hidden costs add up to $23,686 per year for the average homeowner.

Here are five of the most common expenses homeowners often run into.

1. Utilities

The study says the average homeowner spends $7,679 each year on utilities.

“Electricity, water and natural gas have all gotten more expensive thanks to inflation, fuel costs and infrastructure investments,” said Kristen Herhold, director of public relations at Clever Real Estate.

2. Maintenance

Renters usually rely on landlords to handle repairs and upkeep. Homeowners, by contrast, should expect to spend an average of $5,162 a year maintaining their property.

“Labor and materials are up across the board and skilled trades remain in short supply, so when you need a roofer or an HVAC tech, you pay more for the work,” Herhold said. “A new HVAC system costs at least $5,000 and a new roof can be $10,000 or more. Most buyers know these things will eventually need replacing, but they don't budget for the actual price tag or build a savings cushion.”

3. Renovations

Homeowners spend an average of $3,929 a year on renovations. These projects are optional, but they can help preserve a home’s value or raise it over time.

4. Property Taxes

Property taxes are another cost that can catch buyers off guard, averaging $3,580 a year.

“About 41% of homeowners say their property tax bill has been more expensive than they originally expected,” Herhold explained. “Buyers tend to focus on the mortgage payment when they're shopping for a home and taxes get tucked into escrow as an afterthought. Then assessments go up and suddenly the monthly housing payment is a lot higher than what they signed up for.”

5. Homeowners Insurance

The typical homeowner now pays $3,336 a year for insurance.

“Homeowners' insurance premiums have jumped sharply in recent years, especially in states dealing with severe weather, wildfire or hurricane risk,” Herhold said. “Insurers are paying out more in claims and passing those costs along to homeowners. Our survey found that 62% of homeowners are stressed about rising insurance costs and 22% worry they could lose coverage entirely.”

Bonus: HOA Fees

People who buy in planned communities may also face another major expense. Membership in a homeowners association adds an average of $4,196 a year in fees.

Mortgage payments often get the most attention during the buying process, but recurring expenses usually decide whether a home stays affordable over the long run. Buyers who account for utilities, maintenance, taxes and insurance before closing may be better prepared for the real cost of ownership.