The True Cost of Owning a Home in Phoenix, Arizona
Owning a home is a dream for many, symbolizing independence, stability, and a chance to build long-term wealth. But what are the real costs of homeownership beyond just paying the mortgage in 2025? A recent article by Nick Pisano on Real Estate Witch breaks down the expenses homeowners face in 2025, revealing some surprising insights.
Annual Homeownership Costs
According to Pisano, the average American homeowner pays over $24,000 per year in addition to their mortgage payments. These costs include:
- Utilities: $7,319 per year (29.8%)
- Maintenance: $6,087 per year (24.8%)
- Renovations: $5,762 per year (23.5%)
- Property Taxes: $3,057 per year (12.4%)
- Homeowners Insurance: $2,304 per year (9.4%)
For those in a Homeowners Association (HOA), there’s an additional cost of $3,077 per year, bringing the total to $27,606 annually.
The Hidden Costs of Homeownership
- Higher-than-Expected Costs: 81% of homeowners say the costs are higher than they anticipated, with many regretting their decision.
- Time and Effort: Homeowners spend an average of 6.9 hours per week on maintenance and repairs, equating to more than a year over a 30-year mortgage.
- Generational Differences: Millennials and Gen Zers are more likely to feel stressed and regretful about the costs compared to older generations.
- Financial Impact: 21% of homeowners have had to eliminate non-essential spending, and 12% have dipped into their retirement savings to cover home-related expenses.
The Biggest Surprises
The most surprising costs for homeowners are property taxes and maintenance. Property taxes have reached a median of $3,057, and maintenance costs are nearly $6,087 annually. Many homeowners also express concerns about rising homeowners insurance costs.
Future Plans and Recommendations
Despite the high costs, 83% of homeowners plan to make renovations or improvements in the next five years. Pisano suggests that potential buyers should be well-prepared for these expenses and consider budgeting for unexpected repairs and maintenance.
Let’s break down the median home values in the Phoenix area. This information is something many agents will not really talk about when they are trying to sell you homes on social media because, let’s be honest, these are scary numbers if you are a first-time home buyer. In Phoenix, Arizona, the median home price ranges from $445,000 to $495,000. The current value for Phoenix is $445,000, but including all of Maricopa County raises the value to $495,000, due to high-end markets like Paradise Valley and Scottsdale. Here’s a breakdown for the price range:
Phoenix, Arizona Median Home Price (January 2025): $445,000
| Cost Category | Annual Cost | Percentage of Home Value |
| Utilities | $7,319 | 1.64% |
| Maintenance | $6,087 | 1.37% |
| Renovations | $5,762 | 1.29% |
| Property Taxes | $3,057 | 0.69% |
| Homeowners Insurance | $2,304 | 0.52% |
Total annual cost: $24,529 (5.51% of home value)
Maricopa County Median Home Price (January 2025): $495,000
| Cost Category | Annual Cost | Percentage of Home Value |
| Utilities | $7,319 | 1.48% |
| Maintenance | $6,087 | 1.23% |
| Renovations | $5,762 | 1.16% |
| Property Taxes | $3,057 | 0.62% |
| Homeowners Insurance | $2,304 | 0.47% |
Total annual cost: $24,529 (4.96% of home value)
For homeowners in a Homeowners Association (HOA), add the HOA fees:
| Cost Category | Annual Cost | Percentage of Home Value ($445,000) | Percentage of Home Value ($495,000) |
| HOA Fees | $3,077 | 0.69% | 0.62% |
Total annual cost with HOA: $27,606
- Median Home Price $445,000: 6.20% of home value
- Median Home Price $495,000: 5.58% of home value
Additional Insights for Phoenix, AZ
- Average Time on Market: Homes in Phoenix spend an average of 61 days on the market.
- Real Estate Trends: Phoenix is experiencing steady growth with a median list price of $495,000.
- Buyer Preferences: Many homebuyers in Phoenix are looking for modern, spacious homes with energy-efficient features.
As a realtor in the Phoenix-Scottsdale-Mesa area market, understanding these costs can help you better advise on the true costs of homeownership in the Valley of the Sun. This information is not intended to discourage first-time home buyers but to keep them informed. These numbers for Phoenix are based on information provided by Nick Pisano; however, some may argue they are higher or lower based on their own analysis. For more detailed insights, refer to the full article by Nick Pisano on Real Estate Witch.
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