‘I feel trapped’: how home ownership has become a nightmare for many Americans

Scores in the US say they’re grappling with raised mortgage and loan interest rates and exploding insurance premiums. “I bought my home in a hurry in 2020,” said Meg, 60, an office manager from Maryland. “It was less expensive to take on a mortgage than to keep paying ever-increasing rents for my college-student daughter and me.”.

Now housing costs consume 50% of her income. Although Meg said she felt “grateful to have our little house”, the purchase has lost its luster. Her aging row home needs various repairs, while other costs associated with home ownership rose continually too.

“I had to take out an additional mortgage to replace the heat and AC system,” she said. “I keep increasing the deductibles on the home insurance to try to keep the premiums down. They ratchet up every year, while my income does not. I won’t be able to do more repairs unless our circumstances change significantly. Our necessities consume 75% of my income, with 50% of that housing costs.”.

Meg was among scores of home owners from across the US who shared with the Guardian how much they have been struggling with the rising cost of home ownership. Elevated mortgage and loan interest rates, exploding home insurance premiums and rising property taxes in many parts of the country, as well as higher costs for energy and eye-watering costs for home maintenance works have flipped the dream of owning a home into a nightmare for many Americans.

Homeowners who had assumed their properties would become valuable assets and provide security described their homes as “money pits” and “financial burdens”, and said they felt stuck in homes they could barely or no longer afford, with insurance, taxes, utilities and maintenance now often costing more than people’s mortgages.

“I’ve come to view home ownership and healthcare as destabilizing forces in my life,” said Bernie, a 45-year-old network engineer from Minneapolis. To finance owning his and his wife’s $300,000 home and saving for the future, the couple was foregoing medical and dental treatment of any kind and cutting back on expenses everywhere, he said, despite a pre-tax household income of more than $250,000.

“In four years we plan to sell our home and move full-time into an RV,” Bernie said. “Our house provides no security.”. Amie, 44, a self-employed writer from rural Maine, purchased her $260,000 home in 2020, securing a 30-year fixed mortgage at an attractive 3.5% interest rate.

“Although my mortgage is reasonable, the price for anything else is causing considerable financial stress for my partner and me,” she said. “Home oil costs are astronomical. The cost to make energy efficient repairs such as new windows, improved insulation, or heat pump installation are beyond our financial reach.

“Quotes to redo our roof range between $65,000 and $140,000, more than I make in a year. Home equity loan interest rates are at 11% now around here, and I’m scared to commit to such a big loan at the risk of losing my house if I can’t pay the monthly fee.”.

Property taxes of about $4,000 annually are another worry. “They just went up again,” Amie said. “I recently had to create a payment plan for the electricity bills. If we could build a small holding on this land and get rid of this house I absolutely would. It’s completely overwhelming. I feel trapped.”.

Amie’s concerns were echoed by many who said they now wanted to rid themselves of homes that had become too expensive to own and maintain, but felt mostly unable to do so: selling and moving somewhere cheaper, various people said, would force them onto higher interest mortgages; others said they had considered going back to renting, but had concluded this was not feasible either due to exponentially rising rents in many parts of the US.

Stephanie, a 49-year-old psychotherapist, sold her Massachusetts home and moved to Colorado, where she, her sister and her fiance purchased a manufactured home for $130,000. “It’s all we could afford given our student loans and my temporary disability due to multiple surgeries in seven months,” she said. “I don’t believe it’s feasible for me to own a non-manufactured home again. After I sold my last home, I walked away with only $200k, after 17 years of mortgage payments and large expenditures on upkeep.“.

While the resale value of manufactured homes can be very low, Stephanie hopes to evade costly repairs because of her new home’s simplicity, as well as the risk of falling into mortgage arrears in times of illness. Various older people who had either paid their homes off already or were expecting to be mortgage-free soon said they would likely have to sell and relocate to areas with lower taxes for homeowners, among them 60-year-old Angela, a product manager from a southern Chicago suburb.

“I bought this house 19 years ago for $220,000,” she said. “If I’m lucky, I can sell it for $300,000.” Local house prices, she said, had not gone up by very much in all this time, in part because local property taxes were prohibitively expensive.