Repair Items Inflate Costs of Homeownership

If you thought purchasing a home was expensive, just wait till you see what it costs to maintain it. Home prices have been shooting up, and this year was no exception when the median price in June hit $152,600, up almost 9 percent already from June, 2000. For the homebuyer, the cost of homeownership is a high hurdle to overcome. But wait, just as soon as you get used to paying a mortgage loan, there's more. A recent study commissioned by The Wall Street Journal shows that the long-term cost of keeping a typical home up to date for 30 years probably exceeds the initial purchase price by 300 to 400 percent.

The study conducted by Robert Sheehan, a housing economist, concludes that home repair costs and renovation expenditures are higher than most homeowners realize. In fact, it may cost more than the mortgage, as much as three to four times the initial purchase price. Using a hypothetical homeowner who purchased a four-bedroom house in 1968 for $38,300, Sheehan calculated the same owner would have repaired, renovated and replaced to the tune of $140,786. Most of the items would include major necessities such as carpeting or roofing, or renovations over time such as kitchen and bath updates.

But it's not simply a matter of waiting 30 years for things to wear out. The maintenance cycle is actually closer to ten years, even for today's newer homes. The biggest repair items start to surface after 10 to 20 years according to home building experts, including foundations, waterproofing, furnaces, air conditioning, ductwork, roofing and other costly repairs. Furthermore, buying a new home versus an existing home doesn't guarantee a reprieve from repairs simply because it's newer, because today's homes are built with slightly lower quality materials. A 1990 home will cost only about one-third less to maintain than a 1960 vintage home, according to experts. In fact, newer construction homes can put you faster and deeper in the hole than older homes, replacing slightly inferior workmanship and materials that wear out quicker.

Fortunately, home values are rising and creating a source of cash for renovations and repairs through home equity loans. And it appears homeowners need all the help they can get, according to The Wall Street Journal study which calculated major repair and replacement costs on a hypothetical brick house over 30 years:

Total: $140,786

Sources used to create this article include June Fletcher and The Wall Street Journal.

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