U.S. households now spend almost $300 a month on utilities as energy bills climb

A new LendingTree review says electricity and natural gas costs are rising faster than inflation, adding more strain to family budgets

• The typical American household pays close to $295 each month for utilities, with electricity making up the biggest share.

• Since 2016, electricity and natural gas prices have increased more quickly than overall inflation, and utility bills differ widely by location.

• Consumers may be able to cut costs by asking providers about pricing options, payment plans, billing mistakes, and energy assistance programs.

Utility bills are among the household costs that are hardest to avoid, and for many Americans they are becoming more expensive.

A new LendingTree analysis found that the average U.S. household spends $295 a month on utilities, with electricity accounting for the largest portion of that amount.

Although utility expenses edged down slightly nationwide in 2024, electricity and gas prices have risen much faster than inflation over the past decade. Depending on where you live, monthly costs may be even higher.

ConsumerAffairs spoke with Matt Schulz, LendingTree’s chief consumer finance analyst, about the forces behind these costs and what households should know about the growing effect of utilities on their budgets.

How LendingTree carried out the analysis

LendingTree analysts relied on 2024 American Community Survey data from the U.S. Census Bureau, obtained through IPUMS, to study utility expenses across the 50 largest U.S. metropolitan areas.

The researchers examined four household expense categories: electricity, gas, water, and other home heating fuels such as oil, wood, and kerosene. They calculated average annual costs for households that paid each bill separately and then divided those totals by 12 to determine monthly averages.

The analysis left out households whose utility costs were bundled into rent or condominium fees, as well as those reporting no charge or no use for a specific service. Researchers also compared 2023 and 2024 expenses to measure year-over-year changes and estimated how much of each metro area’s median household income went toward utilities.

Finally, LendingTree used Consumer Price Index data from the Bureau of Labor Statistics to compare changes in electricity and natural gas prices with overall inflation between 2016 and 2025.

What the analysis showed

These were the main findings from the review:

• The average household spends nearly $295 a month on utilities. The national average came to $294.66. Electricity was the largest expense at $198.08 per month among households that paid that bill, followed by natural gas at $113.74, water at $106.47 and other home heating fuels at $60.01.

• Location makes a major difference. Fresno, California, had the highest average monthly utility costs at $409.63. Boston ranked second at $370.59, followed by Birmingham, Alabama, at $364.03. Denver had the lowest average at $238.19.

• Utilities consume a larger share of income in some cities. Fresno residents spend about 6.6% of the metro area’s median monthly household income on utilities, the highest share among the 50 metros. Birmingham and Memphis, Tennessee, followed at 5.8% and 5.7%, respectively.

• Costs fell slightly nationwide in 2024, but not everywhere. The average monthly bill declined by $1.68, or 0.6%, from 2023. Even so, costs rose in 24 of the 50 metros. San Jose, California, saw the biggest increase at 8.7%, while Birmingham and Charlotte, North Carolina, each rose 7.7%.

• Electricity and gas have outpaced inflation. From 2016 to 2025, natural gas prices climbed 59.1%, and electricity prices rose 41.1%. Over the same stretch, overall consumer prices increased 34.1%.

Ways to reduce utility bills

If you have already reduced energy use around the home, Schulz suggested a few additional steps for consumers looking to lower their bills.

“When a family has already cut back, the next move is to make sure the bill is working as hard as it can for them,” he said. “Call the utility and ask whether a different rate plan could lower the cost. Ask about budget billing, too, if big seasonal swings are making the monthly budget tougher to manage.

“It’s also smart to look for any billing mistakes. Small home repairs can help over time, but the fastest savings may come from a conversation with the provider.”

Utilities remain a top priority

For many consumers, monthly finances are already stretched.

Still, Schulz said utilities should stay near the top of the priority list, since falling behind can make a difficult month even worse, especially if late fees are added or service is at risk of being shut off.

“The best time to call the provider is before that happens,” he said. “Many utilities have payment arrangements for those in a short-term rough patch, and consumers are more likely to have choices when they reach out early.”

He also recommends checking state and local energy-assistance programs, particularly before the most expensive heating or cooling months begin.

“The important thing to remember is that help is often available, but it won’t just come looking for you,” he said. “It is really easy to feel powerless and hopeless as bills climb and budgets tighten. However, you likely have more options than you think you do, if you’re willing to pursue them.”