For many, owning a home is an essential part of the American Dream. Younger generation buyers, in particular, still see buying a home as one of their life goals.
But as veteran homebuyers can attest, the reality of homeownership extends far beyond just paying a mortgage.
According to a new report from Real Estate Witch, the average American homeowner pays an additional $24,529 per year in hidden costs—including utilities, maintenance, property taxes, and insurance.
Over a 30-year mortgage, these expenses add up to a staggering $735,870.
With 81% of homeowners reporting that these costs are higher than expected, it’s crucial for buyers to fully understand what they’re signing up for. Let’s break down the most significant hidden expenses of homeownership and how they impact financial stability.
The True Cost of Owning a Home
While the mortgage may be the biggest monthly payment, it’s far from the only one. In 2025, homeowners are spending more than ever on essential home-related costs:
- Utilities: $7,319 per year
- Maintenance: $6,087 per year
- Renovations: $5,762 per year
- Property Taxes: $3,057 per year
- Homeowners Insurance: $2,304 per year
- HOA Fees (for applicable homes): $3,077 per year
Adding it all up, the annual cost of homeownership can rival—or even surpass—the cost of the mortgage itself.
For those in an HOA, the total average cost jumps to $27,426 per year.
Eight out of 10 homeowners say the full cost of owning a home is higher than they expected, with some costs more surprising than others:
- 37% say property taxes were higher than they anticipated, with 31% saying this was the most surprising cost of homeownership and 46% saying they don’t feel their property taxes accurately reflect the value of their homes
- 32% were surprised by the cost of their homeowners insurance, with 19% saying it was the most surprising cost
- 23% say the cost of home improvements and renovations were higher than expected
- 22% say the cost of home maintenance and repairs surprised them most
- 22% were floored by HVAC (furnace/air conditioning) costs
- 21% were not prepared for the cost of roof work
- 20% did not expect utilities to cost as much as they do
- 17% were unprepared for plumbing costs
- 15% cited the cost of maintaining the home’s appearance
- 13% said exterior maintenance costs were surprisingly high
- 13% did not expect lawn care/landscaping to be a strain on their budget
Financial Struggles and Difficult Decisions
With rising homeownership costs, many homeowners are being forced to make tough financial decisions:
- 21% have eliminated non-essential spending like vacations or big purchases.
- 12% have dipped into their retirement savings to cover home expenses, a move that could have long-term financial consequences.
- 8% say they can’t afford basic home maintenance at all.
Given these financial pressures, it’s no surprise 44% of homeowners believe owning a home is simply too expensive, and 15% have considered going back to renting due to the cost burden.
The upside is that 85% of these homeowners are not considering a return to renting. But that 15% would have benefited from working with an agent who educated them on the total cost of owning a home in their market.
No one can predict unexpected costs from things like natural disasters, but you can still build trust with real transparency around the true cost of homeownership.
It’s all part of building lifetime relationships with your clients.
The Burden of Home Repairs and Maintenance
One of the biggest shocks for homeowners is the sheer amount of time and money required for home maintenance.
- Annual repair and maintenance costs average $6,087, with common expenses including:
- Major appliance replacements (68%)
- Painting and staining (67%)
- Plumbing repairs (64%)
- Roof repairs (59%)
- HVAC issues (59%)
- Homeowners spend an average of 6.9 hours per week on home maintenance and repairs—adding up to 359 hours (or 15 full days) per year.
- 46% of homeowners don’t actively budget for unexpected repairs, leaving them vulnerable to costly surprises.
With so many unexpected costs, nearly half of homeowners (46%) admit they underestimated repair and maintenance expenses before buying their home.
First-Time Buyers Face the Biggest Challenges
The learning curve is steepest for first-time homeowners, who often underestimate the true cost of owning a home.
- 54% of first-time buyers were surprised by maintenance costs, compared to just 28% of repeat buyers.
- 53% would have approached home buying differently if they had known the full financial burden.
- 46% have postponed necessary home repairs due to financial constraints.
- 40% feel stressed by homeownership costs, compared to just 26% of repeat buyers.
- 12% say owning a home has negatively impacted their mental health—more than double the rate of experienced homeowners (5%).
Planning for the Future: How Homeowners Are Adapting
Despite these challenges, most homeowners (83%) are still planning home improvements over the next five years. The most common projects include:
- Painting (45%)
- Landscaping upgrades (31%)
- Bathroom remodels (29%)
- Smart home technology upgrades (17%)
That said, more than half (51%) have postponed repairs due to cost, and 20% have left a major home issue unfixed for over a year. Nearly half (46%) admit they don’t actively budget for unexpected home repairs. And a majority of them (59%) say they could not afford a $5,000 emergency repair without racking up credit card debt.
Help Your Buyers Avoid Surprises
Before purchasing a home, buyers should factor in more than just their mortgage payment. Unexpected maintenance costs, rising insurance rates, and increasing property taxes can turn a seemingly affordable home into a money pit.
Here’s what you can encourage your buyers to do to avoid surprises:
- Set aside at least 1-3% of your home’s value annually for maintenance and repairs.
- Budget for higher utility and insurance costs—especially in disaster-prone areas.
- Factor in HOA fees when purchasing in new developments.
- Prioritize an energy-efficient and low-maintenance home to reduce long-term expenses.
For many, homeownership is still worth the cost—but going in with realistic expectations can make all the difference. Understanding the full financial picture can help buyers make smarter choices and avoid the pitfalls that lead so many homeowners to regret their purchase.
Full disclosure: the report on Real Estate Witch does encourage buyers to negotiate their real estate agent’s commission to “save during the process” of buying a home. Rather than trying to win a buyer’s business by being the “cheapest,” be prepared to show your value.
Buyers need to see how you can save them more long-term while going above and beyond to help them find and purchase a home they will love (and not regret buying).
Read the full report for more, including charts and methodology.
