Homeowners Struggle With Hidden Real Estate Costs: Insurance, Taxes

Even homeowners with record-low mortgage rates now face staggering increases in often-overlooked fees, changing the calculus for millions of buyers.

Mar. 18, 2026 at 8:23am

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Homebuyers tend to focus on the sticker price, down payment, and monthly mortgage payment, but often overlook other significant ownership costs like taxes, insurance, and homeowners' association fees. These "hidden costs" have surged in recent years, driven by factors like natural disasters, supply chain issues, and labor shortages. The rise in these non-mortgage expenses is squeezing homeowners across the board, with the most insurance-burdened borrowers more likely to fall behind on their mortgage payments, even among those with high credit scores.

Why it matters

The increase in these secondary costs is changing the affordability calculus for both existing homeowners and prospective buyers. Homeowners who bought in the past few years may not have planned for such dramatic increases in their non-mortgage expenses, while future buyers will need to factor in these higher costs when determining what they can afford. This trend highlights the complex web of factors, from climate change to global supply chains, that can impact the true cost of homeownership.

The details

Homeowner's insurance expenses have skyrocketed, driven by rising material and labor costs as well as an increase in natural disasters like wildfires and hurricanes. Property taxes have also surged alongside rising home values, and a growing share of American homeowners belong to homeowners' associations (HOAs) that demand hefty fees. These non-mortgage costs now account for about 40% of a typical homeowner's monthly housing payments, up from 38.5% in 2021. The most insurance-burdened borrowers, even those with high credit scores, are more likely to be past-due on their mortgage payments.

  • In 2020, the credit union withheld about $400 a month on average from mortgage borrowers to cover their taxes and insurance costs. The typical amount these days is $600 — a 50% jump.
  • From 2014 to 2019, home insurance premiums rose by 12.3%. In the past year alone, monthly premiums jumped 6.6%.

The players

Heather Long

The chief economist at Navy Federal Credit Union.

Steve Koller

A fellow at the Harvard Joint Center for Housing Studies who studies climate change and property insurance.

Joel Berner

A senior economist at Realtor.com.

Andy Walden

The head of mortgage and housing market research at ICE Mortgage Technology.

Erik Hembre

A senior economist at the Federal Reserve Bank of Minneapolis.

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What they’re saying

“It's been dramatic. People generally don't plan for that fast of an increase.”

— Heather Long, chief economist at Navy Federal Credit Union

“Maybe if you bought your home in 2016, you thought that your property insurance would increase at the same rate as the cost of goods and services across the economy, but that's just not the case.”

— Steve Koller, fellow at the Harvard Joint Center for Housing Studies

“Beyond principal and interest, there are a lot of monthly fees that can make it hard for people to be able to afford a home, to buy it upfront, or to stay in the home that they already own.”

— Joel Berner, senior economist at Realtor.com

What’s next

Homeowners can take steps to mitigate future insurance cost increases, such as retrofitting their homes to make them less vulnerable to natural disasters or choosing less-risky locations. However, not all homeowners have the resources to make such adaptations.

The takeaway

The rise in "hidden" homeownership costs, from insurance to taxes to HOA fees, is changing the affordability calculus for both existing homeowners and prospective buyers. This trend highlights the complex web of factors, from climate change to global supply chains, that can impact the true cost of owning a home, underscoring the need for homeowners and policymakers to address these challenges.