The Housing Economics Research Team from real estate site Trulia released the findings from their study, Covert Costs: Utilities Are the Hidden Cost of Housing, and found that it’s not necessarily the weather that impacts your utility bills, it’s where you live. And it's not based on climate either.
The highlights of the report include the following:
- Nationally, based on data from UtilityScore, people in single-family homes spend a median of $2,715 annually ($226 monthly) on utilities, or $1.68 on a square-foot basis, or 1.4 percent of the median single-family home value.
- Utilities represent the hidden cost when buying or renting a single-family home in Georgia. The median annual utility cost for the state is the highest nationwide in dollars, at $4,347, as a proportion of single-family home values at 2.9 percent; and the second-highest on a per-square-foot basis at $2.48 (after Hawaii at $2.57).
- Of the largest 100 metro areas, Atlanta has the most expensive median annual utility costs by dollar amount at $4,353, and is in the top 10 on both a price-per-square-foot basis ($2.31) and as a percentage of home values (2.6%).
- El Paso, Texas, came in with the least expensive median annual utility cost, at $1,818; and with the sixth-most inexpensive on a price-per-square-foot basis at $1.28.
- Of the top 20 most expensive zip codes by median annual costs, most are in Arizona and coastal California.
- Climate is not a good predictor for how much median utilities cost at the zip-code or metro level.
The findings suggest is that if you are buying or renting a first home, depending on where you live, utilities could have a big impact on overall affordability– in some cases even between zip codes that border each other.
The economics research team partnered with UtilityScore to conduct a nationwide survey on how much of the monthly budget utility bills represent in single-family homes.
The researchers used utility costs as a percentage of home value to effectively measure monthly housing costs for both renters and owners. Other variables were considered too – insurance, taxes and mortgage interest, among them. Where noted, the team used estimates of those expenses to arrive at overall monthly costs.
Researchers also found no significant correlation between climate and median annual utility amounts. The places with the largest deviations do not have higher annual utility bills than those with very small deviations from comfortable temperatures, i.e. 72 degrees (Fahrenheit).