Average cost of owning a home, 2021
The price of owning a home goes far beyond the initial payment after signing the contract.
Why it matters: As home prices continue to rise, and mortgage rates have reached a 22-year high, the total cost of homeownership in some areas of the U.S. reveal eye popping figures in a new report.
By the numbers: The report calculated the average cost of owning a single-family home over 13.2 years — the average occupancy period — in all 50 states and Washington, D.C
In addition to purchasing and closing fees, the total figure was also factored in other costs beyond mortgage repayments that homeowners face: insurance, ongoing maintenance and utilities such as gas, electric, water and WiFi.
Between the lines: Hawaiians spend the most at an average of $1,482,229 over the average property lifetime, while West Virginians spend the least at $321,194.
Between the lines: Mortgage repayments for a typical 3-bedroom home cost $322,147 over the average property lifeline and included “private mortgage insurance, homeowner’s insurance, and property taxes,” the study found.
Zoom out: There are several ways to reduce homeownership costs, such as “a larger down payment, efficient appliances, alternative energy strategies and do-it-yourself repairs” and “refinancing at lower rates” when mortgage rates recede, per the New York Times.
Our thought bubble via Axios’ chief economics correspondent Neil Irwin: Buying a home essentially means buying two things: the land underneath, which tends to hold its value or appreciate — and the house itself — which is a depreciating asset. Homeowners end up paying for that depreciation one way or another.