Study Shows Insurance, Other Factors Push ‘Hidden Costs’ of Home Ownership by $16K Annually

Rising insurance costs are contributing to “hidden costs” that are putting more pressure on household incomes, a new study shows.

A new study from Zillow and Thumbtack finds hidden costs of homeownership add up to $15,979. These costs include insurance, maintenance and property taxes.

Insurance premiums have surged 48% in the past five years, but the cost of coverage isn’t the biggest hit to homeowners. The analysis gives the breakdown for the hidden costs: $2,003 for homeowners’ insurance, $3,030 for property tax and $10,946 for the average cost of maintenance.

Household incomes rose by 3.8% in the past year compared to the 4.7% increase in insurance costs, according to the study.

In Miami, insurance premiums averaged $4,607, up 72% in the last five years. New Orleans, Sacramento and Atlanta have also seen increasing insurance premiums ranging from 56% to 72%.

Other studies have shown these extra costs of home ownership are rising. Bankrate’s Hidden Costs of Homeownership study release earlier this year found the annual average cost of owning and maintaining a single-family home in the U.S. was $21,400. Factors like home maintenance ($8,808), utilities and energy ($4,494), property taxes ($4,316), home insurance ($2,267), internet and cable ($1,515) were included in that study.

The Zillow and Thumbtack analysis shows that hidden costs range from $21,320 to $24,381. In expensive coastal metro areas like New York City, San Francisco, and Boston.

The top five cities in the U.S. with the highest hidden costs of homeownership are New York City ($24,341), Los Angeles ($19,321), Chicago ($17,375), Dallas ($16,569) and Houston ($15,658).

For the analysis researchers estimated annual property tax and homeowners’ insurance costs for the average U.S. homeowner then compared year-over-year changes and pre-pandemic benchmarks.