Non-mortgage housing costs for U.S. homeowners increased between 2021 and 2023 even as mortgage rates fell over the past year. Mortgage rates have fallen from about 7% to less than 6.5% over the past year.

Homebuyers tend to focus on the sticker price, the down payment, the mortgage rate, and the monthly payment when searching for a home. Taxes, insurance, homeowners' association fees, and maintenance costs are other ownership expenses that have increased in recent years.

Between 2021 and 2023, non-mortgage housing expenditures rose by about 5.5%, outpacing inflation. Over the same period, mortgage principal and interest costs declined by about 0.9%. In 2023, the typical mortgage holder devoted about 40% of their monthly housing payment to non-mortgage expenses, up from roughly 38.5% in 2021.

"It's been dramatic," said Heather Long, chief economist at Navy Federal Credit Union.

In 2020, Navy Federal Credit Union withheld about $400 per month on average from mortgage borrowers to cover taxes and insurance costs. The typical amount withheld from mortgage borrowers by Navy Federal Credit Union to cover taxes and insurance costs is now $600 per month.

Property taxes have increased alongside rising home values since 2019. Since 2019, property taxes have increased by more than 31%.

Insurance expenses have risen due to higher material and labor costs as well as natural disasters such as wildfires in California and hurricanes along the East Coast. The average monthly insurance premium for a single-family home reached an all-time high of $201 last year, a 72% increase from 2019. From 2014 to 2019, average monthly home insurance premiums rose by 12.3%, and in the past year, monthly home insurance premiums jumped by 6.6%.

Homeowners who experienced steep insurance hikes were more likely to be past due on their mortgage payments, including some owners with top-tier credit scores. "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," said Steve Koller, fellow at the Harvard Joint Center for Housing Studies.

Almost 39% of existing single-family homes on the market last year were subject to homeowners' association fees, up from less than 31% in 2019. In many parts of the country, home prices have either flatlined or dipped, and bidding wars for homes are less common than they were at the height of the market.