Zillow cautions buyers about rising housing expenses and mortgage-rate shifts

With mortgage rates still elevated, Zillow is warning prospective buyers that the true cost of owning a home goes well beyond the monthly loan payment.

“Buying a home comes with a price tag, but keeping that home comes with a second one,” Zillow wrote.

In addition to principal and interest, homeowners also face ongoing expenses such as upkeep, property taxes and insurance. Zillow said those costs now add up to $16,566 a year nationwide, or about $1,380 a month.

“Many households focus so much on winning the home and underestimate what it costs to live in it,” said Zillow Senior Economist Kara Ng. “Long after they receive the keys, insurance, taxes and upkeep are recurring expenses to plan for.”

“Since these homeownership costs vary so much by market, home shoppers should run the numbers and understand what they can truly afford before they make an offer.”

Freddie Mac says the average 30-year mortgage rate is 7.32%

The challenge of budgeting for maintenance, taxes and insurance is especially tough for buyers navigating today’s borrowing costs.

Freddie Mac said the weekly average rate on a 30-year fixed mortgage was 7.32%, still high but slightly below the prior week’s 7.40% reading.

“The average 30-year fixed-rate mortgage declined this week, offering some relief to prospective homebuyers,” said Sam Khater, Freddie Mac’s chief economist.

Mortgage News Daily reported a daily 30-year fixed-rate mortgage reading of 7.35%. Even with the recent increase, rates were just 5 basis points above the previous week’s 7.30% low and only 0.02% higher than the prior day’s 7.33% level.

“The Fed announcement had no impact on mortgage rate movement, and minimal impact on intraday bond market volatility,” wrote MND’s Matthew Graham. “Well before the Fed announcement, the bond market was already slightly weaker compared to the previous day’s latest levels.”

“As a result, the average mortgage lender set rates just a hair higher,” Graham added. “Recent upward pressure is a factor of improvement in investor sentiment surrounding the tech sector.”

Zillow breaks down the hidden costs of owning a home

For the average U.S. homeowner, Zillow estimated annual maintenance costs at $11,171, property taxes at $3,129 and homeowners insurance at $2,266.

“Over the past five years, homeowners insurance premiums have jumped 54%, maintenance costs have risen 32%, and property taxes have gone up 19%,” Zillow reported. “But the pace is cooling. Overall, the cost of owning a home rose just 3% in the past year, compared with 32% over five years.”

Maintenance is showing the clearest slowdown among the three major categories.

“Yearly increases in maintenance costs have shrunk every year, from 9% in 2022 to 1% in 2026,” Zillow wrote.

“Insurance may be following the same path. Federal data shows insurance premiums rose just 0.3% between February and June 2026, though they remain well above where they were five years ago.”

Homeownership costs differ widely by region

Only a limited number of large metropolitan areas have seen the sharpest increases in housing-related costs.

Among the 30 metro areas Zillow analyzed, insurance premiums have risen at least 50% over the past five years in 19 of them. Dallas led the list with a 75% jump, followed by Tampa at 71%, Denver at 70% and Houston at 69%.

Miami has the highest annual insurance bill in the country at nearly $5,000. Dallas, Houston, Tampa, Orlando and Denver are the only other markets where yearly premiums now top $3,000.

In Houston, Phoenix, Denver and Nashville, annual insurance costs have even surpassed property taxes, a shift Zillow linked largely to severe weather threats such as damaging winds, tornadoes and hail in vulnerable markets like Dallas and Denver.

“Maintenance remains the largest hidden cost everywhere, at roughly two-thirds of the national total, and tops $12,000 in six major metros, including Seattle ($12,594) and Boston ($12,486),” Zillow wrote.

“Los Angeles experienced the sharpest surge in maintenance expenses, jumping 27% year over year,” the company added.

“This steep rise reflects a mix of regional factors, including wildfire-related recovery efforts, heightened demand for home services, and persistently elevated labor costs.”

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