A recent study shows that rising insurance costs are adding to the hidden expenses that homeowners face, putting extra strain on household budgets. According to research from Zillow and Thumbtack, these hidden costs—covering insurance, property taxes, and home maintenance—total nearly $16,000 a year on average.
Over the past five years, homeowners’ insurance premiums have jumped by 48%, increasing faster than household incomes, which only rose by about 3.8% last year. Insurance alone now costs homeowners roughly $2,000 annually, while property taxes average $3,030, and maintenance runs about $10,946.
Some cities are feeling this impact more than others. In Miami, for example, insurance premiums have shot up 72% in five years, averaging $4,607. Other cities like New Orleans, Sacramento, and Atlanta have seen increases between 56% and 72%.
These findings line up with other reports showing the high expenses tied to owning a home. Earlier this year, Bankrate found the yearly cost of owning and maintaining a single-family home in the U.S. reaches around $21,400, factoring in maintenance, utilities, taxes, insurance, and services like internet.
The Zillow and Thumbtack study also highlights that in pricey coastal cities like New York, San Francisco, and Boston, homeowners face hidden costs ranging from $21,320 up to $24,381. New York City tops the list with nearly $24,341 in extra costs each year, while Los Angeles, Chicago, Dallas, and Houston also rank among the highest.
Researchers calculated these figures by estimating average annual property taxes and home insurance costs and tracking their changes compared to previous years and before the pandemic.
With these extra expenses rising faster than incomes, homeowners may find their budgets tighter than expected. It’s a reminder that the cost of owning a home goes beyond the mortgage, and those hidden costs can really add up.