By Kerry Smith

“House poor” has nothing to do with size or the number of incomes. It reflects a feeling that housing expenses are higher than owners can easily handle.

ORLANDO, Fla. – Most Americans dream of homeownership. However, independence from a landlord comes at a cost, and a study by ConsumerAffairs unveiled that a majority found the price of ownership more than they expected.

Renters who once “called the landlord” if anything went wrong discover they have to call a company to fix broken washing machines, hot water heaters and more. And the cost of those repairs – no longer included in the rent – can be more than anticipated. The cost of a roof replacement alone can be a major shock.

According to ConsumerAffairs, seven out of 10 homeowners consider themselves “house poor” – a belief that the cost of ownership is high enough to make a major dent in the family budget. About three in five said the repair, maintenance and upkeep costs were more than they anticipated, with little left to save or use for other expenses.

“House poor” doesn’t suggest a home’s size. The study authors say the owners of the smallest home on a block may be okay, while the owners of the largest home may feel as if every penny goes into the real estate they own.

It also doesn’t relate to the amount of equity a homeowner has in their property unless they’re reconsidering some kind of refinance to tap into it.

Study results on “house poor” homeowners

  • 73% say that meeting household expenses is increasingly difficult
  • 78% of millennials felt somewhat house poor
  • 54% say house-related expenses are their most considerable financial burden, despite their homes being their most significant asset
  • 40% say housing expenses are more than they can afford

Single owners appear to feel a greater burden (79%), but two-income families (65%) also think it’s “harder than it should be to meet household expenses.” Overall, 69% consider themselves house poor.

Underestimated homeownership expenses

  • Regular repair (63%) and maintenance costs (60%)
  • Insurance premiums and homeowners association (HOA) fees (49%).
  • 4 in 10 homeowners cited property taxes and associated fees as a problem
  • 44% say home expenses caused them to carry credit card balances
  • One-third say they have trouble meeting all their monthly financial obligations.

© 2021 Florida Realtors®

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Author: kerrys