Why owning a home is so pricey ...

[GON]

It is more than just interest rates and current home prices making homeowning a pricey challenge- taxes and insurance

It is really getting tough to own a home. The discussion often centers around the price of the home, and interest rates. Taking a back seat is often taxes and homeowners' insurance. The below chart is eye opening.

One has to wonder if homeownership in the U.S. will be on a steady decline. Maybe other forms of residences will be the new normal, like multi generations living in one residence (like most of the world), living in RVs, etc.



From Chuck Cowan:
A recent Wall Street Journal story highlighted how the percent of the average mortgage payment that is now going towards "property taxes and home insurance" is the highest it has ever been. This reality, combined with higher interest rates, has made home affordability much more difficult for far too many people. Property taxes rarely decline, and home insurance premiums don't appear headed for any meaningful decrease anytime soon. The direction of mortgage rates will have a significant impact on the affordability of homes for future buyers.

 

[Cropduster172]

Utilities are no small expense either. We average about $200/month for water/sewer in our primary home. It's 4Xs what it costs in our beach house which has a pool, outdoor shower, lawn sprinkler system and is 1600 sf smaller.
Privatization of water/sewer is a national scam.

 

[Dave Hess]

Some are people actually living in sheds cause homes are too expensive.

There’s a guy on YouTube (Shed Happens) that repossesses backyard sheds. Families are wanting to fight the repo guy trying to take their shed (home). Cops get called in many of his videos.

That’s what people are now considering for housing.

 

[eljefino]

Some places are hard to insure. Hopefully banks will set a proper ceiling for loan qualification amounts, considering the extras that must be included. With said ceiling, new construction will be sized and sited appropriately... eventually.

 

[Owen Lucas]

I think we need a DOGE for local and state governments as well.

 

[tbm5690]

It is really getting tough to own a home. The discussion often centers around the price of the home, and interest rates. Taking a back seat is often taxes and homeowners' insurance. The below chart is eye opening.

One has to wonder if homeownership in the U.S. will be on a steady decline. Maybe other forms of residences will be the new normal, like multi generations living in one residence (like most of the world), living in RVs, etc.

Locale plays a huge part, among other factors. In my case, my payment to myself for taxes and homeowner's is 30% of my total cost with mortgage but my mortgage payment is considerably smaller as we put 20% down at 2.62%. More typical is 5% down at 6.5% which, assuming we are in the same home, shrinks the ratio considerably. So, I would almost expect to see a decline on this chart given increasing mortgage payments that I would only assume are increasing at a higher rate than the "other" expenses are increasing, but I guess I'm wrong?

That all aside, I agree with you that homeownership will likely continue to decline.

 

[rijndael]

We average about $200/month for water/sewer in our primary home.

Privatization of water/sewer is a national scam.

Same here, on both counts. I can't consider watering my grass, it'd be a $600 bill for that month.

100Y over is another county, I pay per month what they pay per quarter.

 

[JeffKeryk]

My neighbors tend to send their children to top notch colleges. They also tell me their kids probably cannot afford to live here.
It's hard.

 

[JohnnyJohnson]

Where I live affordable housing is a lie. First off they want north of $20,000 plus for a building permit then $70,000 fee along with the contractors $20,000 fee to hook to the sewer. Figure another $6K to 10K a year in taxes!

 

[Passport1]

My beach house property taxes are greater than my primary residence in town and insurance is higher on coastal property. Utilities are lower over a year average mostly because I don't use it probably five months/year. Also I turn off most of the nonessential energy vampires. During the summer months about equal between the two houses.

 

[Dave Hess]

I think we need a DOGE for local and state governments as well.

Sad but true.

 

[Pew]

Taxes here doubled what they were 4 years ago. If I take my townhouse/surrounding townhouses at current market value of ~$250k (was ~$160k before covid) and add taxes and insurance with a 30-year loan at today's interest rates, I'd be paying over $2000/month for 1300sqft.

I think we need a DOGE for local and state governments as well.

Absolutely

 

[thastinger]

Taxes have doubled since 2020 and Insurance went up 1300 bucks this year (to 2833) because the estimated cost to rebuild the house went up 150K due to inflation.

 

[RoadDukie]

Taxes have doubled since 2020 and Insurance went up 1300 bucks this year (to 2833) because the estimated cost to rebuild the house went up 150K due to inflation.

This^^^^^^^^^^^^^^

Same situation for me here in Colorado. It's getting mighty expensive to live anymore...

 

[MRC01]

Like any complex problem it arises from multiple contributing causal factors. Zoning, permitting & other charges & regulations on building housing. Inflation & COL increasing the cost of materials & labor. High insurance due to increasing claims in certain areas due to weather, crime and other factors. Utilities that are local monopolies without proper oversight. States & localities increasing property taxes to meet their out of control spending - some of which is approved by local voters. Just to name a few, the list goes on.

As for solutions, the more self sufficient you are, the more you can do yourself, you can save some of the rising costs. But not all of them.

 

[SevenBizzos]

I'm not moving until I'm taxed out of this place. I hope to make it to retirement first.

 

[gfh77665]

When you own them free and clear the taxes and insurance don't stress you too much.

 

[thastinger]

When you own them free and clear the taxes and insurance don't stress you too much.

I do, but 8K a year...in post tax dollars...to pay for for taxes and Ins is not the kind of money I would keep walking from if it dropped out of my pocket walking down the sidewalk.
I guess I could drop the Ins but there really isn't anything between either dropping it or paying it, because here, you have to carry enough to totally replace the house.
The taxes...I'll never really own this place, they let me stay here so long as I pay the tax bill in full.

 

[alarmguy]

It is really getting tough to own a home. The discussion often centers around the price of the home, and interest rates. Taking a back seat is often taxes and homeowners' insurance. The below chart is eye opening.

One has to wonder if homeownership in the U.S. will be on a steady decline. Maybe other forms of residences will be the new normal, like multi generations living in one residence (like most of the world), living in RVs, etc.



From Chuck Cowan:
A recent Wall Street Journal story highlighted how the percent of the average mortgage payment that is now going towards "property taxes and home insurance" is the highest it has ever been. This reality, combined with higher interest rates, has made home affordability much more difficult for far too many people. Property taxes rarely decline, and home insurance premiums don't appear headed for any meaningful decrease anytime soon. The direction of mortgage rates will have a significant impact on the affordability of homes for future buyers.
View attachment 256448

This to me just means if the public cant afford it, home prices will come down. But that isnt mentioned in this story above ^^.
It cant be that hard to own a home, there is no glut of homes in reasonable cost areas. Most of this talk is media generating stories.
More people own homes now than the 1960s. Think about that, at time in the current generation that people are staying single putting off getting married and raising families. I would suggest homeownership rate is the highest in history for married couples planning families.

https://dqydj.com/historical-homeownership-rate-united-states/

 

[Cropduster172]

Same here, on both counts. I can't consider watering my grass, it'd be a $600 bill for that month.

100Y over is another county, I pay per month what they pay per quarter.

That's approximately the same ratio we pay primary to beach home. Beach home is in an expensive zip code in NJ. But it's municipal water/sewer which is serviced by a private company but administration is the municipality.
Primary home it's Aqua...they are thieves.