Homeownership Costs Have Exploded Since Start Of Pandemic As Inflation Drags On

Homeownership costs have surged since pandemic lockdowns began four years ago due to inflation, soaring insurance premiums and rising utility costs, according to a study from personal finance website Bankrate.

The mean annual cost of owning and maintaining a typical single-family home, based on Redfin’s median sales price of $436,291, reached $18,118 in March, Bankrate reported. This represents a 26% increase from 2020 when the average annual outlay for owning and maintaining a home was $14,428.

Bankrate’s estimates come from tracking the cost of a basket of expenses that includes property taxes, homeowners insurance, home maintenance costs, energy costs and internet and cable bills.

The spike in homeownership costs is driven largely by inflation. Between March 2020 and March 2024 cumulative inflation was 21%, according to the United States Bureau of Labor Statistics. However, this does not account for the differential between the 21% cumulative inflation experienced in the broader economy and the 26% increase in homeownership costs.

This differential stems largely from insurance premiums. On top of inflation and an uptick in natural disasters, insurance companies have faced increased “litigation abuse” in which plaintiffs sue insurers for exaggerated damages, according to Bankrate.

Florida has been particular wrought with litigation; despite accounting for just 9% of insurance claims in the United States, Florida was responsible for 79% of the country’s home insurance lawsuits in 2021, according to a