Credible: Americans Spend Nearly $5,000 More Per Year on Homeownership Than Expected

(Illustration credit: DA 28/pexels.com)

Homeownership is a goal for many Americans, but a new report from personal financial marketplace Credible finds many are financially unprepared for this milestone.

Credible found 63% of American homeowners say they underestimated the trust cost of homeownership. That figure jumps to 73% for first-time home buyers.

•             44% of everyone surveyed said they were not financially prepared for the true cost of homeownership when they bought their home–52% of first-time home buyers said the same.

•             84% said they do not believe first-time homebuyers receive enough education about the true cost of owning a home.

•             Homeowners pay nearly $5,000 more per year than expected on homeownership costs.

Elevated mortgage rates and rising home prices are two of the primary factors making it more difficult for Americans to afford a home. At the same time, housing expenses comprise more than just a monthly mortgage payment, and prospective buyers don’t always know what to expect when budgeting for homeownership, the report noted.

The disconnect between expectations and true costs was especially common among younger generations. Gen Z homeowners were more likely than other respondents to say they underestimated costs (75%), compared with 68% of millennials, 58% of Gen X and 53% of baby boomers. Women (65%) were more likely than men (61%) to underestimate the true cost of homeownership.

Credible cited several commonly overlooked expenses, including:

Property taxes

Homeowner’s insurance, flood insurance, and earthquake coverage

HOA fees

Utility bills

Maintenance and repairs

“In fact, 37% of respondents said they currently live with an inconvenience because a home repair is too expensive,” the report said. “That share increases to 42% for first-time home buyers.”