Home Operation Costs Lower for New Homes
New NAHB research based on the latest 2019 American Housing Survey (AHS) shows that, on average, homeowners spend around $9,240 per year to operate and maintain a single-family detached home. This includes property taxes, insurance, maintenance and utilities, with property taxes being the costliest component.
Annual operating costs increase consistently with household income, home size and value. When measured as a share of home’s value, annual operating costs average close to 5 percent, but the rate is smaller for newer homes (3 percent of the home’s value for homes built after 2010). The regional differences in operating costs are substantial as well, ranging from around $6,270 per year in the East South Central Division to over $13,000 in New England. This effect is primarily connected to taxes.
The largest component of operating costs are property taxes, accounting for just under $3,700, or 40 percent of the annual operating costs. Fuels – the second largest component of operating costs – average just over $2,500, or 27 percent of annual operating costs. Fuels include the costs of electricity, gas, oil or other fuel (wood, coal, kerosene, or other).
Home insurance is the next most expensive item on the operating costs list. On average, homeowners pay just over $1,250 to cover home insurance. In addition, homeowners spend close to $1,000 on maintenance – narrowly defined in the AHS as spending on minor routine repairs that do not include improvements and major repairs. Water and trash collection bills amount to $850, on average.
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