The Real Cost of Owning a Home: A Homeowner's Detailed Bill

The idea that renting simply throws money away is glib and untrue: many costs of owning a home are invisible to people who have never owned one. Eric Turner publishes his own numbers from two houses so readers can decide between buying and renting.

Buying: settlement costs add roughly 3%

When Turner bought his current home in early 2011, the closing costs totalled $12,777.92, about 3% of the purchase price. The list includes a $594 origination charge, a $395 appraisal, $840 in lender title insurance and $1,785 in owner title insurance, $3,612.50 in state tax and stamp fees on the deed, $3,745 paid into escrow for taxes and insurance, and a $900 first-year insurance premium. He notes those figures are certainly higher today.

The monthly payment is mostly interest at first

His first payment in January 2011 was $2,329.92: $482.64 principal, $1,299.81 interest, $389.67 tax, $44.75 insurance and $113.05 in private mortgage insurance. Less than 21% of the payment reduced the loan, while $1,847.28 was pure expense. He notes he paid about the same for a very nice one-bedroom apartment in downtown Baltimore, which makes the rent-versus-buy decision far less clear-cut. Private mortgage insurance is removed once equity reaches 20%. Today he pays $515.50 a month in property tax, $111.17 for insurance and $31.36 to cover an escrow shortage, for a current total of $2,440.48.

Maintenance, repairs and utilities

The rule of thumb is to set aside at least 1% of a home's value each year for maintenance and repairs, and more for older houses. His 1983 home had been rented out for years and neglected: a new roof cost $9,390, new windows $10,530, new siding $21,046, replacing leaking skylights $6,566, replacing polybutylene water pipes $5,050, new gutters $2,714 and $2,800 to cut down trees that stood too close to the house. He did the small repairs himself: $95 for a dishwasher drain pump, $185 for a leaking faucet and $65 for an HVAC control board. Improvements are a separate line: he built a deck for about $15,000, roughly half the average contractor estimates he received. Electricity is rising too. In January 2024 he paid 17.3 cents per kWh including fees and taxes; by May 2026 that was 24.7 cents, a 42% increase in two years, which he attributes partly to auction-based rates and to demand from new AI data centres.

Selling, appreciation and the verdict

Selling can cost upwards of 10% of a home's value. When he sold a house in Auburn, Washington in 2007 the costs reached $26,038.17, including $17,980 in commission and $5,932.40 in county excise tax,. He bought that house for $321,000 and sold it for $333,000; after buying and selling costs he reckons he lost more than renting an apartment would have cost. His current home cost $420,000 in 2011 and Zillow now estimates its value at about $757,000. US home values have risen an average of 3.8% a year since 1991. His conclusion: buying can make sense if you plan to stay long enough for appreciation to outpace the expenses, and quality of life counts as well.