Here are some of the heftiest costs of homeownership to be aware of:
Property taxes. This is often
the largest home expense after a mortgage, and some of the highest property-tax rates are in the Northeast. Buyers there might need to take extra financial measures to make sure they can afford their home. Homeowners in Buffalo, N.Y., for example, pay 2.9 percent of their home’s value in property taxes. In Rochester, N.Y., they pay 2.8 percent. Nationally, homeowners pay an average of $2,100 a year in property taxes, according to the Census Bureau. “In states where you have wealthier people with more expensive homes, that tends to drive property taxes higher,” says John Buhl, spokesperson for the Tax Foundation.
Home insurance. Buyers in Florida beware: Average home insurance costs in the state are the nation’s highest. At $298 per month, it’s nearly three times the national average of $102 per month, according to Insurance.com. (The average cost of insurance refers to policies on a $200,000 home with a $1,000 deductible and a $100,000 liability.) Also, make sure to
bust these home insurance myths for your clients.
Maintenance and remodeling. A leaky roof or cracked foundation can be costly to repair. Financial experts suggest setting aside 1 percent of your home’s value for maintenance costs each year.
Know which projects will put the most money back in your clients’ pockets.
Utility bills. Water and electricity bills can add up, but buyers should also remember that they have to pay for trash pick-up as well. Homeowners in Connecticut spend the most on heating oil at an average of $104 per month, according to an analysis by WalletHub. Owners in the city of Bridgeport incur an average $309 monthly bill for heating oil and natural gas—the highest in realtor.com®’s study. Areas of Florida have some of the highest electricity bills due to high use of air conditioners. Owners in Cape Coral, Fla., pay an average of $216 a month for electricity—the highest in the country. Miami residents pay $184 a month for electricity.
So, overall, where will homeowners pay the highest costs? Realtor.com® ranked the 100 largest metro areas by criteria such as property taxes, home insurance premiums, remodeling costs, maintenance and repairs, and pest control. These are the seven cities where the cumulative costs of homeownership are highest.
1. New York
- Property tax rate: 2 percent
- Average home insurance (monthly): $78
- Average utility cost (monthly): $234
2. Bridgeport, Conn.
- Property tax rate: 1.7 percent
- Average home insurance (monthly): $75
- Average utility cost (monthly): $309
3. Boston
- Property tax rate: 1.5 percent
- Average home insurance (month): $99
- Average utility cost (monthly): $236
4. Cape Coral, Fla.
- Property tax rate: 1.1 percent
- Average home insurance (monthly): $298
- Average utility cost (monthly): $220
5. New Haven, Conn.
- Property tax rate: 2.2 percent
- Average home insurance (monthly): $75
- Average utility cost (monthly): $291
6. Miami
- Property tax rate: 1.2 percent
- Average home insurance (monthly): $298
- Average utility cost (monthly): $188
7. New Orleans
- Property tax rate: 0.6 percent
- Average home insurance (monthly): $248
- Average utility cost (monthly): $158
Source: “Top 10 Markets With the Highest Hidden Costs of Homeownership,” realtor.com® (June 5, 2017)
