Real Estate platform Zillow announced on November 13 that American homeowners are burdened with an average of $15,979 in hidden costs annually, further increasing the pressure on housing affordability.
Among the total hidden cost of $15,979, maintenance costs make up the largest portion, averaging $10,946 per year. Additionally, property taxes average around $3,030, and insurance costs approximately $2,003 annually.
Zillow stated, “Over the past year, these costs have collectively risen by 4.7%, while household incomes have only increased by 3.8%. This pressure is most apparent in costly coastal cities – hidden costs in New York City reach $24,381, San Francisco at $22,781, and Boston at $21,320.”
This translates to an average of $1,325 in additional monthly costs for homeowners, which are expenses beyond the monthly mortgage payment. According to data from real estate brokerage firm Redfin for the four weeks ending on November 9, the median monthly mortgage amount is $2,495.
Zillow reported that since February 2020, the average homeowner insurance costs in the U.S. have increased by 48%.
Kara Ng, Senior Economist at Zillow, highlighted, “The rise in insurance costs is nearly double the increase in homeowner incomes.”
“This is not just an expense in the budget. For first-time homebuyers, it has become a barrier; for many families, it is a heavy burden.”
“In the current scenario of soaring housing costs, buyers must understand and factor in these hidden expenses into their budget to better assess their housing purchasing power.”
Zillow reminds potential homebuyers to understand their actual purchasing power and plan for expenses like maintenance costs early in the home-buying process.
The company also suggests buyers reconsider the type of homes they are looking to purchase. For instance, buying a large, standalone home with a spacious backyard would mean higher maintenance costs.
Along with the persistent high housing prices and mortgage rates, hidden costs will further exacerbate the pressure on housing affordability.
According to data from the Federal Reserve Bank of St. Louis, the average U.S. home sale price in the second quarter of 2025 was $512,800, a nearly 20% increase from the second quarter of 2021 at $428,600.
Meanwhile, figures from the mortgage entity Freddie Mac as of the week of November 13 show a 30-year fixed mortgage rate of 6.24%. This rate was around 3% four years ago.
Since September 2022, mortgage rates have consistently remained above 6%, presenting ongoing pressure on homeowners.
However, from a positive standpoint, the current rate of 6.24% is lower than the peak of 7.04% recorded in January this year.
In a commentary on November 13, economist Lisa Sturtevant from real estate data company Bright MLS remarked that lower mortgage rates may prompt “some buyers to enter the market.”
She noted this could make the final two months of this year unexpectedly busy in the housing market, a time that typically sees a slowdown in home sales activity.
Sturtevant wrote, “Uncertainty has become a double-edged sword in the real estate market today. While economic worries and declining consumer confidence have kept many buyers on the sidelines, the anticipation of continued uncertainty into 2026 may prompt some buyers to act, taking advantage of the lower rates and more inventory.”
The National Association of Home Builders stated in a release on October 16 that despite facing market challenges like macroeconomic uncertainty, builder sentiment increased in October.
Buddy Hughes, the association’s chairman, highlighted that the recent decline in mortgage rates is an “encouraging signal for housing affordability.”
He stated, “There are some areas of stability in the housing market, including small builders shifting towards renovation work and continued strength in the luxury home market. However, most buyers are still in a wait-and-see mode, waiting for further declines in mortgage rates.”
To further lower mortgage rates, a significant reduction in the Federal Reserve benchmark rate may be necessary.
In September this year, the Federal Reserve cut rates for the first time in 2025. Subsequently, at the October meeting, the central bank reduced rates by 0.25 percentage points to a range of 3.75% to 4%.