Zillow Homeownership Costs Report: What Rising Expenses Mean for Buyers, Owners, and the Housing Market

The conversation around homeownership in the United States has changed dramatically over the past decade. While most Americans continue to see owning a home as a central component of long-term stability and wealth building, the financial reality attached to that dream has become increasingly complex. The latest Zillow Homeownership Costs Report highlights a critical truth: buying a home is no longer just about affording the mortgage. Instead, it is a multi-layered commitment shaped by rising insurance premiums, property taxes, maintenance expenses, HOA fees, utilities, and the unpredictable nature of inflation.

Zillow’s findings shed light on the true cost of owning a home in 2024–2025, revealing that many households underestimate these expenses by thousands of dollars per year. For first-time buyers, renters planning to transition into ownership, and policymakers trying to understand the affordability landscape, the report offers invaluable insights. This article provides a detailed, in-depth look at the main takeaways, what they mean for the average household, and why the future of homeownership may depend on understanding these evolving costs.

1. What the Zillow Homeownership Costs Report Measures

Zillow’s report goes far beyond listing home prices. Instead, it analyzes ongoing yearly costs that homeowners must pay in addition to the mortgage. The analysis includes:

● Property Taxes

A major expense that varies significantly by state and county. Zillow evaluates tax trends and how inflation affects assessments.

● Homeowners Insurance

Insurance premiums have been rising sharply due to climate risks, hurricane exposure, wildfire dangers, and repair cost inflation.

● Maintenance and Repairs

This covers routine upkeep such as HVAC servicing, landscaping, appliance repairs, and unexpected issues like roof leaks.

● Utilities

Electricity, water, heating, cooling, and waste services are all included.

● HOA Fees (if applicable)

For condos, townhouses, and some suburban communities, HOA fees can add hundreds of dollars per month.

Together, these costs create what Zillow calls the “non-mortgage homeownership burden.” The report reveals that these expenses now make up a larger share of total housing spending than ever before.

2. The Surprising Rise of Non-Mortgage Housing Costs

One of the most striking findings in the Zillow Homeownership Costs Report is the rapid increase in non-mortgage expenses, which have grown at a faster pace than typical mortgage payments.

Property Taxes Are Rising Nationwide

Many states have experienced significant home value appreciation since 2020. While rising home values can benefit owners on paper, they often lead to higher property tax assessments. In some counties, taxes have jumped by more than 15–20% in three years.

Insurance Premiums Are at Record Highs

Insurance companies have raised premiums or restricted coverage in high-risk areas such as:

• Florida

• Texas

• California

• Louisiana

• Colorado

The rising frequency of climate-related disasters means insurers are increasing rates dramatically. Zillow’s report notes that some regions have seen insurance costs double within five years.

Maintenance Costs Are More Expensive Due to Inflation

Materials like lumber, cement, and steel have seen long-term inflationary pressure. Additionally, labor shortages in construction and skilled trades have pushed repair costs upward. Zillow estimates that the typical homeowner now spends $3,000–$7,000 per year on maintenance alone, depending on the age of the property.

Utilities Continue to Climb

Energy prices fluctuate, but overall, Americans are paying more for heating, cooling, and water services. Aging homes with less efficient insulation contribute to higher monthly utility bills.

3. The Financial Impact on New Homebuyers

First-time homebuyers are among the most affected groups. Many enter the market prepared for a mortgage payment but unaware of how much additional costs contribute to total housing expenses.

Affordability Shock After Closing

According to Zillow, many buyers experience “post-purchase affordability shock,” where the ongoing costs exceed expectations by 20–30%. This can create financial stress, especially for households already near budget limits.

The Challenge of Saving for a Down Payment

High non-mortgage costs reduce the ability to save. When potential buyers see rising taxes or insurance premiums in the neighborhoods they want to move into, they may postpone or reconsider buying altogether.

The Need for Better Financial Planning Tools

The report suggests that buyers should calculate ownership costs using:

• A maintenance budget equal to 1–3% of home value annually

• Insurance estimates based on local climate risk trends

• Property tax projections instead of last year’s assessment

• Expected utility increases based on regional energy data

Those who plan with these factors in mind are more likely to maintain long-term stability.

4. Homeowners Are Also Feeling the Pressure

The Zillow Homeownership Costs Report doesn’t only focus on new buyers; it highlights how existing homeowners are being squeezed by increasing bills.

Insurance Companies Leaving Certain States

In areas with high wildfire or hurricane risk, some insurers have pulled out entirely. This forces homeowners to rely on state-backed insurance programs that are often more expensive and offer less coverage.

Fixed Mortgage Payments vs. Rising Extraneous Costs

Many homeowners have stable mortgage payments — especially those who refinanced at historically low rates in 2020–2021. However, their total housing cost still rises because:

• HOA fees increase

• Taxes go up

• Insurance premiums spike

• Utility bills fluctuate

This means even long-time owners are not immune to affordability challenges.

The Strain on Retirees

Older homeowners living on fixed incomes feel these increases most sharply. Even if a home is paid off, rising taxes and insurance can strain budgets, making downsizing or relocating a necessity.

5. Regional Differences in Homeownership Costs

Zillow’s analysis highlights massive differences across the United States.

High-Cost States

States with the highest non-mortgage expenses typically include:

• California

• New York

• New Jersey

• Massachusetts

• Hawaii

High value homes, strict building codes, and elevated insurance costs drive up expenses.

States With Rapid Insurance Growth

States experiencing fast-rising insurance premiums:

• Florida

• Texas

• Louisiana

• Colorado

Climate risk has a large impact in these regions.

More Affordable States

Some states still offer relatively manageable homeownership costs:

• Indiana

• Ohio

• Iowa

• Kentucky

• West Virginia

Lower property values and reduced climate risk contribute to better affordability.

6. How the Zillow Report Affects the Housing Market Outlook

Understanding the real costs behind homeownership has broader implications for the housing market.

Slower Buyer Demand

If non-mortgage costs continue to rise, buyer demand may level off or decline, especially in expensive states. This could moderate home price growth over time.

Shift Toward Smaller Homes

Buyers may begin prioritizing:

• Smaller square footage

• Energy-efficient homes

• Properties with lower taxes or HOA fees

Increased Appeal of New Construction

Newer homes often have:

• Lower maintenance costs

• Better insulation

• Modern electrical and plumbing systems

• Energy-efficient appliances

This makes them more attractive despite higher purchase prices.

Migration Trends Will Continue

Americans have already been moving:

• Away from high-cost states

• Toward lower-tax, lower-insurance states

The Zillow report suggests this trend will continue because buyers are searching for long-term affordability, not just lower mortgage rates.

7. Tips for Buyers to Manage Homeownership Costs

The report encourages buyers to plan strategically.

● Build a Large Emergency Fund

Experts recommend having 3–6 months of home expenses saved.

● Get Insurance Quotes Before Buying

Insurance can vary dramatically from one neighborhood to another.

● Research Property Tax Trends

Look up historical tax increases in the county, not just the current tax bill.

● Plan for Maintenance From Day One

Set aside 1–3% of the home’s value per year for upkeep.

● Choose Energy-Efficient Homes When Possible

This reduces utility bills and long-term expenses.

Conclusion: The True Cost of Homeownership Is Changing

The Zillow Homeownership Costs Report offers a clear message: buying a home today requires more than qualifying for a mortgage. From rising insurance premiums and property taxes to maintenance and utilities, the non-mortgage portion of homeownership has become a significant financial factor — one that can reshape affordability, migration trends, and buyer behavior.

For prospective homeowners, the key takeaway is preparation. For existing homeowners, awareness of escalating costs can help with better budgeting and future planning. And for policymakers, the report provides essential data to address housing affordability challenges nationwide.

Understanding these changing dynamics ensures that homeownership remains achievable — and sustainable — for millions of Americans in the years ahead.