Utilities Add 25% to Homeownership Costs
There are so many factors to consider when purchasing a home. One of those, that many buyer often do not think about, is the cost of utilities. That cost can vary in different parts of the country and even in different areas within the same locale.
IRVINE, Calif. – June 6, 2017 — ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, and UtilityScore, a software provider that helps solar and home improvement companies acquire customers, today released a joint white paper titled “Power Conversion” that analyzes the impact of utility costs on overall housing costs, home affordability and home seller profits.
“Utility costs are a significant, quantifiable factor contributing to the overall costs and risks involved with owning or renting a home,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “On the other hand, reducing utility costs — specifically energy costs through the installation of solar — can amplify the wealth-building potential of homeownership.”
Data-based analyses provide the foundation for five practical strategies outlined in the white paper for businesses to target and engage real estate consumers and homeowners with utility cost data.
“There is a massive untapped opportunity to target, engage and convert customers using data-driven sales and marketing tools based on utility costs,” said Brian Gitt, founder and CEO at UtilityScore.
Utilities add 25 percent to homeownership costs, 21 percent to renter housing costs
everaging proprietary utility cost data from UtilityScore along with public record real estate data from ATTOM Data Solutions, the white paper includes new zip-level research showing that 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 on average nationwide.
Housing costs for homeowners heat map by zip
Housing costs for renters heat map by zip
“We are impressed by UtilityScore’s comprehensive nationwide data set, covering both energy and water costs,” said Maria Seredina with Zillow Group corporate development. “Coupled with information on our platform, this data adds further transparency to the housing search process, helping buyers and renters assess the true out-of-pocket costs of a home beyond monthly mortgage or rent payments.”
35 percent of markets not affordable for average wage earners with utility costs included
Monthly utility costs require 7.0 percent of average wages on average across 931 U.S. counties analyzed for the white paper. When utility costs are included, buying a median-priced home requires more than the 43 percent of income recommended by the Consumer Financial Protection Bureau (CFBP) in 323 of the 931 counties (35 percent). That’s 122 more counties exceeding the CFPB affordability threshold than when utility costs are not included.
“The risk to homeowners and lenders is great,” said Jacob Corvida, manager at the Rocky Mountain Institute, an independent, U.S.-based nonprofit organization focused on driving the efficient and restorative use of resources. “The antidote is to understand utility costs and include them in underwriting assessments.”
Source: RealtyTrac/ATTOM Data Solutions