63% of Americans Underestimate the Cost of Homeownership

Americans are paying nearly $5,000 more per year for homeownership than they expected, according to a survey by Credible. 

Of the homeowners surveyed, 63% said they underestimated the true cost of homeownership, and 69% said monthly housing costs were higher than they expected.  

First-time buyers were especially surprised, as 73% said they underestimated expenses, and Gen Z (75%) and millennials (68%) were more likely to underestimate them than Gen X (58%) and boomers (53%). 

Some commonly overlooked homeownership expenses include property taxes, homeowner’s insurance, HOA fees, utility bills and maintenance/repairs. 

It can be financially stressful for homeowners who don’t factor these expenses in. For 64% of survey respondents, homeownership costs have resulted in financial stress, including 70% of first-time buyers. These unexpected expenses have led Americans to: 

1. Dip into savings/emergency fund (56%)
2. Cut back on everyday spending (55%)
3. Increase credit card balances or take out personal loans (41%) 

Still, 35% said they don’t have an emergency fund for home-related problems. 

Additionally, 38% said they consider themselves house-poor, and 30% of homeowners said 40% of their income or more goes toward housing expenses.  

So, what do they wish they knew? 

The homeowners surveyed said they mostly learned about the costs of homeownership through family and friends (34%) and online research (24%). Still, 52% of first-time buyers said they weren’t financially prepared when they bought their home. The top things they wish they knew include: 

1. How much property taxes can increase (53%) 
2. Cost of maintenance and repairs (52%) 
3. Time and effort needed for upkeep (49%) 

However, despite the unexpected financial challenges, the survey revealed that 91% of respondents still believed that owning a home was worth the expense.