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National Real Estate News: Utilities Add 25% to Homeownership Costs!

Every month we tentatively open our utility bills and hope for the best. Coastal summers are cool so we don't have to worry about air conditioners and our heat only comes on periodically in the early mornings. We're pretty lucky in that respect! Our highest utility cost comes from water. We have set days for watering and tiered rates for usage and during the summer months, we need to be careful about our water consumption. The article talks about utility cost as a percentage of average wages and it brings up a good point about monthly housing costs. Lenders and their underwriters don't consider utility costs in their ratios. Doing so might change the face of lending. Read on...

There’s a reason utility bills feel like they’re taking a bigger bite out of households’ budgets. On average, utility costs—electricity natural gas, water, and sewer—add 25 percent to monthly housing costs for homeowners and 21 percent to housing costs for renters, according to a newly released white paper by ATTOM Data Solutions, a real estate data firm, and UtilityScore, a software provider for solar and other home improvement companies.

Monthly utility costs require 7 percent of a person’s average wages across 931 counties analyzed. When utility costs are included, buying a median-priced home requires more than 43 percent of a person’s income, the study showed.“

The risk to homeowners and lenders is great,” says Jacob Corvida, manager at the Rocky Mountain Institute, a nonprofit organization focused on efficient and restorative use of resources. “The antidote is to understand utility costs and include them in underwriting assessments.”

Source: RealtyTrac/ATTOM Solutions & Realtor Mag


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