Home values have climbed, leaving millions of Americans sitting on substantial equity. But property taxes, insurance and repairs are turning that paper wealth into a monthly cash-flow problem.

The Dream, Then the Bills

Gina bought her home in Houston believing she was doing everything right. “I rushed to purchase my home because it’s the American dream and I was conditioned to believe that you needed your house with an acre of land and a white picket fence,” she said. “But no one warned me about the ballooning payment and the expensive upkeep.” Now she regrets the purchase. Once her mortgage, her student loan and her car note come out of each paycheck, there is very little left over, not enough to build real savings and not enough to say yes when friends make plans. She describes her life now as living to work, rather than working to live. Her story is not one of reckless spending or a bad loan. It is what happens when a set of reasonable financial decisions stack up on one budget at the same time, and the house turns out to be the one bill that keeps asking for more. “Home ownership,” she said, “is a surefire way to deplete your nest egg.”

Gina is far from alone, and in some parts of the country the numbers are even starker. Kelly Hagen owns a three-bedroom house in Vero Beach, Florida, where her homeowners insurance now costs more than $9,000 a year, roughly $750 a month before she pays the mortgage, property taxes, utilities or fixes anything that breaks. She told a local television station that her premium climbed from about $6,000 to $8,000 and then past $9,000, and the increases have become large enough that she is considering selling. That is something homeowners are rarely told to expect when they finally get the deed: leaving not because they couldn’t afford to buy a house, but because they can no longer comfortably afford to keep it. Her experience, reported by WFLX in July, is an extreme example of a problem spreading well beyond Florida.