Housing is the largest item in the expenses of American households even after retirement. Data from the US Bureau of Labor Statistics show that in 2024, housing costs occupy the largest share of the family budget, with total housing costs increasing by 3.3% per year. For owners, the growth is 7%, and for renters - 5.4%.
The problem is especially sensitive for retirees, since their incomes usually grow more slowly than housing costs. According to data from the Joint Center for Housing Studies at Harvard University, in 2024, 34% of American households headed by a person aged 65 or older spent more than 30% of their income on housing. This means more than 12.4 million households. For 6.7 million of them, housing costs consumed more than half of their income.
The situation is most dire for older renters. About 58% of renters aged 65 and over were burdened with excessively high housing costs in 2024. For older homeowners, the share is lower, but also growing – approximately 28% of them spent more than 30% of their income on housing.
Even a paid-off home does not mean cheap housing
It is often assumed that once the mortgage is paid off, housing costs almost disappear. National data shows otherwise.
The U.S. census includes not only the mortgage but also property taxes, insurance, utilities, homeowners’ association dues, and payments on second mortgages or home loans.
In 2024, the average monthly cost for an American homeowner with a mortgage will reach $2,035, up from $1,960 a year earlier, according to the American Community Survey. The main reasons for the increase are higher mortgage costs and insurance premiums.
At the same time, about 35 million homes in the United States are now owned without a mortgage. However, this does not exempt homeowners from fixed costs. The Harvard analysis shows that between 2019 and 2024, the average housing costs of households that own their homes without a loan increased by about 35% - faster than homeowners' income.
Property taxes remain a constant expense
Property taxes are one of the items that do not disappear after the home is paid off.
According to the American Community Survey, the median amount of property taxes paid in the United States in 2024 is $3,211 per year. For homeowners with a mortgage, the median is $3,580, and for those without a mortgage, it is $2,663.
However, the differences between states and even between neighboring municipalities can be enormous. This is why a retiree with a fully paid-off home in a state with high local taxes may have significantly higher constant expenses than someone with a similar property in a cheaper region.
Home insurance is getting more expensive
Another increasingly important factor is insurance. The U.S. Treasury Department warns that homeowners insurance is becoming more expensive and harder to afford in many parts of the country, partly because of the increasing risk of hurricanes, fires, floods and other natural disasters.
A federal analysis of more than 246 million policies shows significant differences by climate risk. In areas in the top 20 percent with the highest expected natural disaster losses, the average real premium was $2,321 per year for the period 2018-2022 – 82% higher than in the lowest-risk areas.
This is especially important for retirees, because higher premiums can become a serious problem on a fixed income, even when the home itself is fully paid off.
Purchase price remains high
For Americans considering relocating after retirement, the purchase of a new home itself also remains a serious financial challenge.
According to official data from the Census Bureau and the Department of Housing and Urban Development, the median price of a newly built home in the United States was $410,700 in the second quarter of 2026. In June, the median was $398,300.
This means that a retiree selling their home and moving to another state should not only compare the sale price of properties. Future taxes, insurance, maintenance, utilities, and HOA fees also matter.
A national problem is becoming more visible
Housing affordability is now a problem far beyond retirees. In 2024, 43.5 million American households, or roughly one-third of all households in the country, will spend more than 30% of their income on housing. For 21.6 million households, this expense will be more than half of their income.
The impact is even greater for older Americans, due to lower incomes after retirement and rising health care costs.
That's why financial experts are increasingly recommending that when calculating the necessary funds for retirement, housing should not be viewed simply as a “paid-off asset“. Even without a mortgage, it continues to generate ongoing costs – taxes, insurance, repairs, energy and fees.
For Americans planning their retirement, the location of the home may be almost as important as the size of the retirement savings themselves.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be seen at imot.bg