The Hidden Costs of Home Ownership: $6,000 a Year
Most new homeowners are prepared to pay their mortgages, but they may not be ready for other unavoidable costs that can amount to thousands of dollars every year.
The average homeowner shelled out $6,042 last year in homeowners insurance, property taxes, and utilities, according to a new report from Zillow. The average costs varied by location, with Boston homeowners spending the most ($9,413) and homeowners in Phoenix spending the least ($4,513).
“Home buyers too often fixate on the sticker price or monthly mortgage payment on a house, and don’t budget for the other expenses associated with ownership -- which can add up quickly,” Zillow spokeswoman Amy Bohutinsky said in a statement.
Related: How to Decide if You Should Rent or Buy a Home
The maintenance costs included in the report included things like lawn care and carpet cleaning.
The country’s homeownership rate fell to 63.7 percent in the first quarter, the lowest level since 1989. The rate peaked at 69.2 percent in the fourth quarter of 2004, right before the housing bubble burst.
As rents in many cities continue to skyrocket, however, homeownership may be becoming more appealing. However, in addition to hidden homeownership costs, new buyers should also consider the opportunity costs of potential earnings if buyers had invested their down payment. The New York Times has a handy calculator that incorporates these and other factors to help weigh whether it makes more sense to rent or buy.
Nearly two-thirds of consumers say that home ownership is a “dream come true” and an accomplishment to be proud of, according to a survey released last week by Wells Fargo.
It’s Official: No Government Shutdown – for Now
President Trump signed a short-term continuing resolution today to fund the federal government through Friday, December 22.
Bloomberg called the maneuver “a monumental piece of can kicking,” which is no doubt the case, but at least you’ll be able to visit your favorite national park over the weekend.
Here's to small victories!
Greenspan Has a Warning About the GOP Tax Plan
The Republican tax cuts won’t do much for economic growth, former Federal Reserve Chair Alan Greenspan told CNBC Wednesday, but they will damage the country’s fiscal situation while creating the threat of stagflation. "This is a terrible fiscal situation we've got ourselves into," Greenspan said. "The administration is doing tax cuts and a spending decrease, but he's doing them in the wrong order. What we need right now is to focus totally on reducing the debt."
The US Economy Hits a Sweet Spot
“The U.S. economy is running at its full potential for the first time in a decade, a new milestone for an expansion now in its ninth year,” The Wall Street Journal reports. But the milestone was reached, in part, because the Congressional Budget Office has, over the last 10 years, downgraded its estimate of the economy’s potential output. “Some economists think more slack remains in the job market than October’s 4.1% unemployment rate would suggest. Also, economic output is still well below its potential level based on estimates produced a decade ago by the CBO.”
The New York Times Drums Up Opposition to the Tax Bill
The New York Times editorial board took to Twitter Wednesday “to urge the Senate to reject a tax bill that hurts the middle class & the nation's fiscal health.”
Using the hashtag #thetaxbillshurts, the NYT Opinion account posted phone numbers for Sens. Susan Collins, Bob Corker, Jeff Flake, James Lankford, John McCain, Lisa Murkowski and Jerry Moran. It urged readers to call the senators and encourage them to oppose the bill.
In an editorial published Tuesday night, the Times wrote that “Republican senators have a choice. They can follow the will of their donors and vote to take money from the middle class and give it to the wealthiest people in the world. Or they can vote no, to protect the public and the financial health of the government.”
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Can Trump Succeed Where Mnuchin and Cohn Have Flopped?
President Trump met with members of the Senate Finance Committee Monday and is scheduled to attend Senate Republicans’ weekly policy lunch and make a personal push for the tax plan on Tuesday. Will he be a more effective salesman than surrogates in his administration?
Politico’s Annie Karni and Eliana Johnson report that both Democrats and Republicans say Mnuchin and chief economic adviser Gary Cohn have repeatedly botched their tax pitches, “in part due to their own backgrounds” as wealthy Goldman Sachs alums. “House Speaker Paul Ryan earlier this month asked the White House not to send Mnuchin to the Hill to talk with Republican lawmakers about the bill, according to two people familiar with the discussions — though Ryan has praised the Treasury secretary’s ability to improve the legislation itself,” Karni and Johnson write.