The Hidden Housing Cost Pushing Millions of Homeowners Over Budget

A new study from Harvard University's Joint Center for Housing Studies (JCHS) highlights a significant oversight in how housing affordability is assessed, revealing that many homeowners are facing greater financial strain than previously recognized. Traditionally, the focus has been on monthly mortgage payments, but the costs associated with home maintenance and repairs have often been overlooked.

According to preliminary findings presented on Friday, 22.7 million homeowners, or 26% of the total, were classified as cost-burdened in 2023, meaning they spent over 30% of their income on housing expenses. However, when researchers factored in expenditures for routine maintenance and major repairs, the number of cost-burdened homeowners surged to 28.4 million, approximating one in three owners. “It would be surprising to many that nearly every measure of cost burdens that you see out in the wild, including those that we most often published, do not account for these expenditures,” stated Alexander Hermann, a senior research associate at JCHS and co-author of the study.

The analysis points out that the ongoing conversation around housing affordability has primarily concentrated on property prices and recurring costs like taxes and insurance. This focus is warranted, given that property taxes have increased by 31% and homeowners insurance premiums have escalated by 72% between 2019 and 2025, as reported by ICE Mortgage Technology and referenced by Harvard.

However, spending on home maintenance has also seen a dramatic rise, garnering significantly less attention. From 2019 to 2023, homeowners collectively increased their spending on routine maintenance from $65 billion to $105 billion, marking a 61% rise. Even after adjusting for inflation, this represented a 35% increase. Hermann noted that maintenance and replacement costs have surged more rapidly than other housing-related expenses, including taxes and insurance.

One reason maintenance costs have been omitted from affordability assessments is the data collection process. Many major housing surveys do not inquire about homeowners' repair expenditures. Additionally, unlike predictable costs like mortgages or taxes, maintenance expenses can be irregular. Homeowners might spend thousands on a roof replacement one year and nothing the next, complicating the evaluation of affordability.

Furthermore, actual spending does not always reflect the necessary upkeep of a property. Homeowners may defer significant repairs during financial hardships, leading to underreporting of spending even as their homes deteriorate. “These expenses can be deferrable to a point, but you can't put them off indefinitely,” Hermann explained.

To address this gap, researchers devised an alternative estimate based on expected maintenance costs, considering property characteristics and spending habits of middle-income households. This revised approach indicated that 30.8 million homeowners, or 35.5%, would be deemed cost-burdened—an increase of roughly 8 million compared to traditional estimates.

As the age of the U.S. housing stock increases, the distinction between what homeowners are spending and what their homes actually require is becoming increasingly critical. In 2023, the median age of owner-occupied homes was 42 years, up from 27 years three decades ago. Homes constructed before 1960 exhibited a structural deficiency rate of over 22%, more than double that of homes built since 2000.

Lower-income homeowners are often the ones facing the highest maintenance demands, yet they are the least likely to have the financial resources to address these issues. For instance, those living in homes built before 1960 and belonging to the highest income quintile spent an average of $12,700 on repairs and improvements in 2023, in stark contrast to just $3,400 spent by those in the lowest income quintile. This disparity does not necessarily imply that older homes require less work; rather, it suggests that lower-income owners may simply lack the means to perform necessary repairs.

Harvard's analysis reveals that the expected upkeep spending creates a broader affordability gap than traditional measures indicate. Among homeowners earning less than $30,000 annually, 75% already exceeded the standard housing-cost threshold, a figure that soared to 93% when upkeep spending was considered. For those earning between $30,000 and $45,000, the percentage of cost-burdened homeowners rose from 43% to 64%.

Older homeowners, particularly those aged 65 and above, face unique challenges in this affordability crisis. While 32% were classified as cost-burdened under standard metrics, that figure climbed to 45% when upkeep costs were included. This demographic often experiences reduced income during retirement, while the need for costly repairs increases. Some may have savings to draw upon, but others must choose between maintaining their homes and preserving cash for immediate needs.

Research indicates that neglecting repairs can ultimately affect home sale prices. An 80-year-old homeowner typically realizes a return that is approximately half a percentage point lower than that of a 45-year-old homeowner, translating to more than a 5% decrease in sale price over an average holding period of 11 years, according to findings from the National Bureau of Economic Research.