The Average Costs Of Owning A Home

Regular, Ongoing Expenses Of Owning A Home

When it comes to maintaining a home, there’s more to it than simply making your mortgage payments. Many costs which may not be at the forefront of our minds are still essential for day-to-day life, and for ensuring the longevity of your home. Let’s unpack some of these essential, ongoing costs of homeownership.

Utilities

Average annual utilities costs: $4,158

Source: Rocket Homes^®

Seasoned renters are already accustomed to the cost of utilities like gas, electricity and water. They should be prepared to foot a larger utility bill when entering homeownership. Owning a home can come with more amenities and square footage, which can mean higher utility bills

Since the cost of utilities varies based on location, we recommend doing your research. For example, Champion Energy gives its clients a range of various energy plans that may meet everyone’s demands, so investigate Champion Energy rates before making a decision. understand each of the various utilities required for a single-family home in your area and make sure that you transfer all the accounts in your name. Missing a utility payment will cost you in penalties, so try to avoid this mistake by knowing know who you need to pay and when.

Housekeeping And Cleaning

Average annual housekeeping and supplies costs: $837 

Source: Rocket Homes^®

To keep you and your family healthy, a clean home is more of a necessity than a preference. Warding off pests, eliminating bacteria and getting rid of dust all requires some sort of budget. Whether you want to hire a cleaning service or buy your own supplies and do the work, plan for these costs before jumping into homeownership.

Homeowners Association (HOA) Fees

Typical monthly HOA fees: $200 – $300 per month 

Source: Rocket Homes^®

If you’re looking to plant roots in a community with a homeowners association (HOA) or a condo association, don’t be surprised by the monthly fees you’ll have to pay. HOA fees are a price every resident must take on to be a part of that community. These funds are typically pooled and put back into the community. Communal spaces, like recreational areas or a pool, landscaping and walkway or road maintenance are some examples of what HOA fees are used for.

HOA fees, like most aspects of homeownership, vary based on where you’re located and the upkeep involved in that particular community. For example, a single-family home in a suburban neighborhood will incur a smaller HOA fee than, say, a luxury condo in a popular metropolitan area. Many neighborhoods don’t have HOAs at all.

Private Mortgage Insurance (PMI)

Annual Private Mortgage Insurance (PMI): 0.5% – 1% of loan amount 

Source: Rocket Homes^®

As mentioned earlier, borrowers who make a down payment less than 20% on a conventional loan are typically required to buy private mortgage insurance (PMI). PMI is a monthly premium of 0.5% – 1% of the loan amount each year. For a $300,000 loan, PMI can be $150 – $300 a year, or $12.50 – $25 a month.

With conventional loans, once you reach 20% equity in your home, you’ll be allowed to cancel PMI. FHA loans, however, use a slightly different type of mortgage insurance. The difference? Borrowers who put down less than 10% with an FHA loan will be stuck with mortgage insurance for the rest of their loan. Additionally, FHA loans require that the borrower pays an upfront fee for mortgage insurance, usually 1.75% of the total loan amount.

Pest Control Subscription

Average one-time visit pest control costs: $250 – $600 

Average monthly pest control costs: $1510 – $300 upfront, $45 – $75 per month

Source: Forbes Advisor

Life happens, and sometimes that means dealing with bed bugs, mice or other unexpected visitors. When it comes to protecting your home from these infestations or removing these pests from your home, it’s best to leave things to the experts.

Costs vary based on numerous factors, but it’s wise to have a couple hundred dollars to a few thousand in reserves for this kind of emergency.

Internet, Phone, Cable And Streaming Service

Average monthly cable and internet costs: $116 per month 

Source: U.S. Cable & Internet Market Size and Household Spending Report 2021

Let’s face it: today, it’s nearly impossible to live without the ability to communicate efficiently. Factor the costs of your internet provider, streaming services, phone plan and cable into your home buying budget.

While you may not need all of the above, it’s likely that you’ll need reliable internet access. Be sure to shop around for bundles or deals in your area.