A recent study has shown that when buying a house in the United States, one not only needs to consider the house price and mortgage interest rates but also many expensive “hidden costs” that invisibly increase the burden on homeowners.
Since the outbreak of the pandemic, housing prices in the United States have been continuously rising, with a further upward trend expected in 2026. Online real estate trading company Zillow points out that owning a house in the future may pose even greater challenges, as hidden costs such as home maintenance, insurance, and property taxes are also on the rise.
According to the latest report from Zillow and online service marketplace Thumbtack, the average annual hidden homeownership costs in the United States have reached as high as $15,979. In major cities like New York City and San Francisco, these costs are even higher.
A report by consumer financial services company Bankrate titled “2025 Home Affordability Report” found that 45% of homeowners in the United States regretted their home purchasing decisions, mainly due to unexpected additional costs such as hidden fees.
So where do these additional costs go? Zillow’s report indicates that homeowners spend an average of $10,946 annually on home maintenance, including expenses for HVAC system maintenance, roof repairs, lawn care, gutter cleaning, and tree trimming.
Additionally, an average of $2,003 is needed for home insurance and $3,030 for property taxes. In other words, homeowners on average have to spend an extra $1,300 per month in addition to their mortgage payments. Over the past year, these costs have increased by 4.7%.
In coastal metropolitan cities where housing prices are already high, these hidden costs are even more expensive: for example, New York City homeowners spend an average of $24,381 annually, San Francisco homeowners around $22,781, Boston around $21,320, Los Angeles homeowners $19,321, and San Diego homeowners $19,088.
While home maintenance is the largest hidden cost, home insurance costs are experiencing the fastest growth in expenditure.
Zillow found that since 2020, the average home insurance premium in the United States has surged by 48%. For example, homeowners in Miami, Florida, now pay an average of $4,607 annually for home insurance, a 72% increase since 2020; New Orleans, Louisiana has seen a 79% increase; Sacramento, California a 59% increase; and Riverside County, California a 56% increase.
Californians, in particular, have strongly felt the impact of premium increases. Since 2023, the entire state’s insurance industry has been in crisis. Following catastrophic wildfires in Los Angeles earlier this year, homeowners and insurance companies are facing even greater difficulties.
Taking California’s largest home insurance company, State Farm, as an example, by the end of June, the company had paid out over $4.2 billion in claims to wildfire-affected customers in Los Angeles. Starting from June 1, State Farm temporarily raised home insurance premiums by 17%, rental home insurance by 15%, and apartment rental unit owner’s insurance by 38%.
For homeowners, in addition to dealing with soaring premiums, many living in high-risk areas find it challenging to obtain insurance coverage. According to the Insurance Information Institute (III), in high-risk areas, California homeowners may face average annual premiums of over $10,000.
Multiple industry experts have warned that due to various driving factors, insurance prices in California may continue to rise in the next 10 to 20 years.
Zillow economists recommend potential buyers to thoroughly consider their financial situation and affordability when purchasing a home, while also planning for maintenance costs early on and avoiding unexpected expenditures.
Reconsidering the type of property to purchase is advised. Standalone homes with large backyards often come with higher maintenance costs. Budget-conscious homebuyers may consider more affordable options such as townhouses or apartments, which may have lower maintenance costs.
Opting for a newly constructed home can save on future expenses. Sometimes, investing more upfront can be more cost-effective. New homes typically require less maintenance in the short term, allowing buyers to enjoy their new residence more easily without worrying about additional repair costs.
Previous experts from Zillow also suggested that when purchasing a home, conducting a comprehensive inspection for potential defects is a good way to avoid unexpected maintenance costs. Sometimes, negotiating with the seller to discount repair costs from the house price can save funds. Since maintaining a home is unavoidable, choosing regular and ongoing maintenance is more cost-effective in the long run.