People tend to think that buying a home means only paying principal and interest. Most conveniently forget the other myriad of expenses associated with being a homeowner. As Americans find less disposable income in their bank account each month, less Americans are becoming homeowners. The middle class is moving away from the American dream because of the slow process of inflation. Beyond the principal and interest, people spend money on taxes, utilities, furniture, repairs, insurance and other costs that come with being a homeowner. Even non-homeowners spend an inordinate amount of money on housing. Overall Americans spend 33 percent of their income on housing-related items. This is probably why Wall Street has an insatiable appetite to buy up properties to convert them into rentals. Americans are now seeing a large share of their income going into the housing pipeline.
How much do Americans spend on housing-related items?
In total, Americans spend $16,687 a year on housing. This amounts to 33 percent of total income on housing-related expenses. We can break down the numbers as follows:
-Households spent most on shelter (59 percent)
– 60 percent of expenditures on shelter were on owned dwellings. These expenses consist of:
-Mortgage and interest charges ($3,067)
-Property taxes ($1,836)
-Maintenance, repairs, insurance, and other expenses ($1,153)
These are the most upfront costs but there are many others:
This post was published at MyBudget360 on OCT 17, 2014.
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