Liz Weston: How to budget realistically for home repairs

If you’re a homeowner and haven’t faced a big repair bill yet, just wait. Even in the best-maintained homes, stuff will wear out or break.

Budgeting for these inevitable bills isn’t always easy. One commonly cited rule of thumb — to save 1% to 4% of your home’s value each year for maintenance and repairs — can give homeowners sticker shock as real estate prices soar.

Accredited financial counselor Kate Mielitz recently purchased a home in Olympia, Washington, where the median listing price is $540,000, according to Realtor.com. Saving even 1% of that, or $5,400, would be a stretch for many owners, says Mielitz, who advises low- to middle-income clients. Saving 4% would mean putting aside $21,600 a year.

“I want to cry just looking at that number,” Mielitz says.

HOME COSTS DEPEND ON AGE, CONDITION, CLIMATE

Rules of thumb have limited value, though, because how much you spend often depends on the age of your home, materials used and local climate patterns, among other factors, says John Wessling, president of the American Society of Home Inspectors.

For example, a laminated-shingle roof may last 35 to 40 years in St. Louis, where Wessling lives. But it could survive less than 15 years under Florida’s harsh sun, he says. Extreme weather events can wreak havoc on homes as well.

How well you maintain your house also can have a big impact, Wessling says. Many homeowners don’t notice window caulking that dries out and splits, for instance, but the water that seeps in can cause enormous damage.

“What might be a $12 or $15 repair could turn into spending $15,000 or $20,000 to rebuild that wall below the window,” Wessling says.

Homeowners spent an average of $950 on home maintenance — or 0.6% of the home’s value — in 2019, according to the latest American Housing Survey conducted by the U.S. Census Bureau. But the amounts varied considerably based on home sizes and age, among other factors. For instance, the percentage of a home’s value spent on maintenance rose from 0.2% for homes built in the 2010s to 0.8% for homes built before 1960.

DECIDING HOW MUCH TO SET ASIDE

People who prefer to hire others should expect to spend more than do-it-yourselfers, says Mischa Fisher, chief economist for home services referral website, Angi. Angi’s survey of 2,934 homeowners who paid for home improvements last year found that they spent an average $3,018 on home maintenance, Fisher says. Those amounts typically ranged between 0.5% and 1% of their…