Home Buying Tips
Lessons From a First-Time Home Buyer: Average Annual Homeowner Expenses vs. Mine
In one of my daily searches for financial news recently, I came across a report from the site Real Estate Witch (which is owned by Clever Real Estate) detailing how much the average American homeowner spends on their house — not even including their mortgage. What it found was, heading into 2025, the average per year is a whopping $24,529. That figure is up significantly from the $17,958 annual average seen in 2024.
Thankfully, in our first year as homeowners, we didn’t see expenses nearly that high. In fact, we came in well below the report’s figures in each area of their breakdown. So, rather than keep it vague, I thought it’d be interesting to go through REW’s figures line by line and compare them to our experience in the past year.
Homeowner Expenses: Comparing Our Numbers to the Average American’s
Utilities
- Average: $7,319
- Our numbers: $2,076
Starting with the largest average annual expense on the list: utilities. Looking at Real Estate Witch, I’m not exactly sure what they consider a “utility” so coming up with our number was a bit difficult. Rather than wonder if Internet service counts or not, I decided to stick with the basics — which, in our case, means electric, water, sewage, and gas. In that case, leveled out across the year, our bill comes to $173 per month. If you want to throw in trash pick up, that figure would rise to $193 a month or $2,316 per year.
Either way, that’s still well below the national average of $7,319. There are likely a few reasons for that. First, while our house is plenty big for us, it’s not huge overall. In contrast, those with larger homes surely pay more to heat and cool it. Speaking of HVAC, climate can also play a role in how much homeowners pay.
Lastly, I’ll note that we’ve made a concerted effort to keep our utility usage in check, making certain efforts to prepare our home for winter weather (for example). That’s paid off as we’ve regularly kept our monthly bill below the previous averages for this house, as provided to us before closing. Still, even if we did turn up the heat more often, I don’t think we’d get anywhere need $7k, thankfully.
Maintenance
- Average: $6,087
- Our numbers: $3,950
Like with “utilities,” I’m not exactly sure what qualifies as “maintenance.” I’ll forgo calculating what we’ve spent on cleaning supplies and the like — but I am counting the replacement water heater and washing machine we’ve purchased as well as the lawn mower we needed to buy after moving in. Together, those items come to around $3,950.
Once again, that’s shy of the more than $6k average. However, going forward, I could see this being an area where we actually should be spending more than we currently are. Although we hopefully won’t need to be buying any other appliances soon, we do need to invest in some other maintenance. In particular, while we tried to clean our gutter by ourselves, we failed — so we should really get someone else to give it a shot before Spring comes. Similarly, we still need to have someone take a look at the giant tree in our backyard and make sure it’s in good shape.
In other words, we may end up being closer to the average in some years — but, on the whole, I do hope we manage to stay under it once again.
Renovations
- Average: $5,762
- Our numbers: $0
Before we bought this home, we naturally had lots of ideas for what we’d change about it. Yet, at the end of the day, we were happy enough with the current state of the house that we didn’t feel the need to immediately jump into any big projects. In fact, the longer we’ve lived here, the more we’ve come to like some things we initially thought we’d want to get rid of. All this is to say that, as of today, we haven’t spent any money on what I’d call a renovation.
Of course, going forward, there are some things we definitely will want to upgrade. At the top of my list are windows so that we can hopefully dampen some of the road noise, while also improving efficiency (which goes back to our Utilities section). And while we’re referencing back to other sections, rather than paying someone to come out and clean the gutters from time to time, I’d rather get those fancy ones with built-in covers.
So, as with Maintenance, this is another category where I expect our expenses to fluctuate greatly from year to year going forward.
Homeowner’s insurance
- Average: $2,304
- Our numbers: $1,003
It’s nice to know that our current homeowner’s insurance policy comes in at about half the cost of the national average. Of course, again, there are several factors that go into this, but it’s reassuring nonetheless. That said, the number I’m using here is from our first-year policy. Sadly, our renewal rate was a bit higher, but we’re still far from the average.
Property taxes
- Average: $3,057
- Our numbers: $962.02
If you thought we were getting a good deal on our homeowner’s insurance, check out our property tax! In this case, we’re under one-third the average. For what it’s worth, this isn’t because Missouri property tax is particularly low as it ranks 22nd overall. However, one small contributing factor is that, as we discovered months after moving in, we don’t live in city limits — which means that’s one bit of tax we avoid.
Alas, like with our homeowner’s insurance, our property tax did go up slightly this year. Between those two changes, our monthly payments also increased to account for the adjusted escrow account. But, when we get further hikes in the future, I’ll just keep in mind that it could be much worse.
Homeowners association fees:
- Average: $3,077
- Our numbers: $0
Finally, while not included in the $24,529 total cited, Real Estate Witch does note that Americans in a Homeowners Association (HOA) pay $3,077 per year in fees on average. Well, this is where we differ strongly as, with no HOA in our neighborhood, we pay $0 in dues. Admittedly, the lack of an HOA for this property was a plus for us as, while these associations do have a purpose in some cases, the expense likely wouldn’t have been worth it for us. So, for now, that’s one expense we’re completely avoiding.
As it turns out, while the average American homeowner is apparently paying $24,529 per year (or $27,606 for those in HOAs) in expenses beyond their mortgage payment, our first-year cost came in at “just” $7,991.02. That’s the good news — but the bad news is that it’s unlikely to always be this way. There’s no doubt that being a homeowner can be quite expensive at times, which is why it’s important that renters looking to make the jump to owning truly understand what they’re getting themselves into.
To be honest, even though we knew most of what to expect, it can still feel a bit overwhelming at times just thinking about what could go wrong. The moral of the story is that, while homeownership can be great, it’s not for the faint of heart — so be prepared.
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