Owning a home is often seen as a major milestone in the American dream, but the reality includes a range of hidden costs that can catch buyers off guard. A new report from Zillow breaks down these surprising ongoing expenses, showing how they vary by location and can significantly impact affordability. From property taxes and insurance to utilities and maintenance, these costs often go unaccounted for in budget planning. Understanding the hidden costs of homeownership is critical for mortgage professionals, real estate agents, and consumers alike to ensure smooth transactions and realistic expectations.
Zillow Report Reveals True Hidden Costs of Homeownership
Zillow’s latest research takes a deep dive into the less visible expenses of owning a home—ones that can really add up after closing. Using data from their own listings, combined with insights from local tax records, utilities, and insurance trends, Zillow compiled an estimate of how much homeowners spend annually beyond their mortgage payments. The national average? Nearly $18,000 a year—an eye-opening figure for many buyers.
These hidden costs include property taxes, homeowner’s insurance, utilities, and maintenance. Zillow found that Boston has the highest average at nearly $26,487 per year, while Las Vegas came in with the lowest at just over $9,000. Maintenance was the largest chunk across most metros, accounting for over 50% of the total. This shows that even though two homes may have the same purchase price and mortgage payment, their total carrying costs can vary wildly depending on location and local conditions.
Perhaps most surprising to consumers is how much regular upkeep can eat into their budget. Landscaping, HVAC servicing, plumbing fixes, and minor repairs add up fast. Zillow’s report emphasizes the importance of financial planning for these recurring costs. It’s not just the one-time costs like moving or furnishing; it’s the long game of keeping a home in good shape, comfortable, and compliant with local codes. Many buyers simply don’t anticipate that level of ongoing investment.
For first-time buyers especially, this insight is gold. Zillow’s economists noted that affordability calculators and pre-approval tools often ignore these variables, giving buyers a false sense of what they can afford. Buyers might budget for a $2,200 monthly mortgage but forget that a $500/month average in extra expenses can tilt their entire financial balance. This disconnect becomes a point of stress—or worse, leads to delinquency or forced sales.
Zillow suggests lenders, real estate professionals, and even listing platforms incorporate estimated hidden costs into the buyer journey much earlier. Doing so can help manage expectations and foster long-term client satisfaction. The more transparent we are about the true cost of homeownership, the better decisions buyers will make—and the more trust they’ll place in the professionals guiding them.
Loan Officer Perspective
This report is a perfect opportunity for loan officers to level up their value proposition. When discussing affordability with clients, go beyond the mortgage payment. Sharing insights like these can build massive trust with buyers who appreciate real-world numbers. Consider partnering with agents to co-host webinars or create handouts that highlight total monthly housing costs—including taxes, insurance, and maintenance.
Real Estate Agent Perspective
Agents can use this data to proactively educate buyers during the home search. When discussing different neighborhoods, include average utility costs, tax rates, and typical maintenance expectations. This not only positions you as a well-informed expert but also helps clients feel more confident in their buying decisions. It’s also a smart tool for managing expectations during showings and offers.
Home Buyer & Seller Perspective
For buyers, this information is critical. Understanding the hidden costs of owning a home helps you plan better and avoid financial strain. If you’re in the early stages of looking or have questions about how much home you can realistically afford, now’s the time to connect with the mortgage or real estate pro who shared this post. They’ve got the tools and knowledge to help you succeed.
Source Article: Zillow
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