Home maintenance cost per year

Home maintenance cost per year is 1% to 2% of the house's worth, with older homes costing more. The typical US home costs $332,700, so 1% equals $3,327 each year. That's $277 a month. At 2%, the monthly cost is about $555. This choice has a greater effect on the rent vs buy result than most buyers realize.

What yearly home maintenance amount should you set aside?

According to Fannie Mae, the common rule assigns 1% to 4% of a home's value each year to repairs and replacements. Age makes these costs vary, so the range is broad.

• For a new home, 1% can be enough. For a $350,000 house, Fannie Mae's example sets a savings goal of $3,500 a year.
• The same guide suggests budgeting closer to 4% for a home more than 30 years old.

Most owned homes are much older than that. The Census Bureau reported that all owned homes had a median age of 41 years in 2021. As a result, fewer houses fit the lower end of the rule than you might think.

What is the average home maintenance cost per year?

The answer varies by the person doing the count. Owner spending surveys report costs at the low end. Quotes to hire a pro for every job run high.

For the lower figures, look to the American Housing Survey. The Census Bureau for HUD conducts that survey. For homes built before 1950, owners spent a median of $1,800 yearly on upkeep. The Census Bureau found that routine maintenance alone was about $540. Over half spent less than 1% of the home's value on upkeep and improvements together.

The first years bring higher costs. The same survey recorded a median annual spend of $3,900 for recent owners of older homes, or 1.5% of the value. After at least 10 years, owners spent about $1,500, or 0.6%.

A Zillow and Thumbtack study provides the higher figures. The study placed annual maintenance for the typical owner at $11,171, based on Thumbtack projects that people asked pros to handle. Zillow's research report gives those figures. Annual maintenance reaches $12,594 in Seattle and $12,486 in Boston. That study also found a 32% rise in maintenance costs over five years.

Why is 1% to 2% the honest home maintenance budget?

The reason is that costs arrive unevenly. In most years, you purchase filters, clean gutters and repair a toilet that won't stop running. A roof or furnace fails, and that single year consumes a decade of savings.

The survey medians account for years with few costs and work that owners handled themselves. Every job in the Thumbtack figure is priced at a professional's rate. For a newer home, the steady 1% rate falls between the two. For an older one, the 1.5% to 2% range does too. This creates a fund for the year when major expenses arrive.

With 1%, the low end of the range, our model tends to favor ownership rather than oppose it.

What are the maintenance costs for a $500,000 house?

Each year, expect to spend about $5,000 to $10,000. A rate of 1% comes to $5,000 each year, or about $417 monthly. A rate of 2% comes to $10,000 each year, or about $833 monthly. For a house over 30 years old, Fannie Mae's 4% would increase the figure further.

How does the cost of upkeep affect whether renting or buying makes more sense?

Money spent on upkeep never comes back to you. It doesn't increase the sale price; its only effect is preventing the house from losing value. A larger budget moves cities from buying to renting.

We changed only upkeep in our model for 813 US cities, using 20% down, a 7-year stay and a 7.24% rate. Buying comes out ahead in the following number of cities:

• At 1% each year, buying wins in 176 cities.
• At 1.5%, buying wins in 110 cities.
• At 2%, buying wins in 64 cities.
• At 3%, buying wins in 28 cities.
• At 4%, buying wins in 16 cities.

Raising the rate from 1% to 2% reduces the number of buy cities from 176 to 64. For the typical home, that raises monthly costs from $277 to about $555, money a renter could instead invest at 8.3%. Try 1%, 2% and 4% in the rent vs buy calculator for your own city. The remaining expenses are part of the costs of owning a home.