I stepped out onto my back porch yesterday morning, coffee in hand, when I heard a familiar sound — my neighbor Tom cursing at his broken sprinkler system. Again. “Third time this year,” he shouted across the fence. That’s when it hit me — homeownership costs go way beyond that monthly mortgage payment, and where you live makes all the difference.
The dream of owning a home comes packaged with financial fine print that varies dramatically depending on which state you call home. I’ve been documenting these hidden costs since buying my Los Angeles bungalow seven years ago, and let me tell you, my friends in other states have entirely different financial stories to tell.
A new analysis from Business Insider reveals the stark reality of these geographical differences. New Jersey homeowners face the steepest annual costs, shelling out a staggering $17,850 per year just on property taxes, utilities, insurance, and maintenance. That’s roughly $1,500 monthly before even touching their mortgage.
“People focus so much on purchase price and interest rates that they completely overlook these ongoing expenses,” explains financial advisor Marta Chen, whom I interviewed at a recent homeownership workshop. “It’s like buying a car without considering gas and insurance.”
Connecticut follows close behind New Jersey with $16,930 in annual expenses, while Massachusetts rounds out the top three at $15,780. As a Californian, I found it interesting that despite our infamously high home prices, we ranked sixth for ongoing costs at $13,680 annually.
The regional patterns make perfect sense when you break them down. New England and Mid-Atlantic states dominate the expensive list due to high property taxes, pricey insurance, and those brutal winter heating bills. My cousin Jen in New Hampshire spends more on heating her modest colonial in February than I do all year in Southern California.
Surprisingly, the most affordable states for homeownership costs cluster in the South and parts of the Midwest. West Virginia homeowners pay just $7,270 annually for these expenses, less than half of what New Jersey residents face. That’s about $606 monthly for all those essential services and taxes.
I called my college roommate Beth who bought a house in Arkansas last year, curious about her experience with the nation’s second-lowest costs ($7,380 annually). “The property taxes are literally a quarter of what my sister pays in Illinois,” she told me. “It makes homeownership possible on my teacher’s salary.”
The wild variations extend to specific expense categories too. Property taxes can range from under $1,000 yearly in some states to over $8,000 in others. My friend Mark in New Hampshire pays no state income tax but has property taxes that would make a Californian weep.
For those of us living in urban centers, these costs compound with higher insurance rates, specialized maintenance needs, and premium utility services. Last summer, my air conditioning bill alone nearly matched my parents’ entire monthly utility budget in Missouri.
The study also highlights how climate plays a major role in these expenses. Southern states face higher cooling costs and storm insurance, while northern regions battle heating expenses and infrastructure damage from freeze-thaw cycles. My sister in Florida pays hurricane insurance that costs more than my entire homeowner’s policy.
Insurance costs represent another major variable. States prone to natural disasters like California (wildfires), Florida (hurricanes), and Oklahoma (tornadoes) typically demand significantly higher premiums. My annual insurance jumped 30% after wildfires came within ten miles of my neighborhood two years ago.
For anyone contemplating a move or first-time purchase, these hidden costs deserve serious consideration in your financial planning. That seemingly affordable home in Connecticut might actually strain your budget more than a pricier property in Tennessee when all expenses are tallied.
As I finished my coffee that morning, watching Tom finally fix his sprinkler, I realized homeownership comes with unexpected lessons in regional economics. The true cost of that dream home might depend less on its listing price and more on the invisible expenses that arrive monthly in your mailbox.
Have you calculated what your state is really costing you beyond your mortgage payment? The answer might surprise you — and change how you think about where you choose to put down roots.
