Even if you have no mortgage on your home, everyone faces monthly utility bills — except those living off the grid. Depending on where one lives and the type of property (varying with size, climate, energy efficiency, and life style and associated costs), the monthly utility bill can be a material and significant expense. Utilities can include electricity, natural gas, water, sewage, TV and Internet service — with costs varying from town to town and across service providers.
As usual I invoke the TINSTAANREM axiom — There Is No Such Thing As A National Real Estate Market or a National Economy. The same is true when it comes to utility expenses. Even two identical homes built by the same builder side-by-side will probably have differing utility costs given the occupants lifestyle alone.
So what is the typical utility expense for homes? Move.org has completed a study addressing this question by state. To estimate typical monthly utility bills, move.org used the following data sources and processes:
Electricity Utilized the U.S. Energy Information Administration (EIA) to find the average monthly electrical consumption for U.S. residents (897 kWh) and multiplied this average by each state’s electricity cost per kWh.
Natural Gas The average U.S. home uses 168 cubic feet of natural gas per day times the state’s average cost.
Internet & Cable Numbeo provides worldwide cost of living data plus other related metrics. Internet service was priced on a 60 Mpps service with unlimited data and ADSL.
Water The U.S. Environmental Protection Agency (EPA) estimates that the average American family uses 300 gallons of water per day. Move.org then referenced the average residential water cost in 30 major cities as provided by Circle of Blue and used that average cost to arrive at an estimated $40 per month. Circle of Blue has tracked water rates for 30 major U.S. cities since 2010.
Other Data Questions, Issues and Considerations While Hawaii has no natural gas production, synthetic natural gas is produced on island and liquefied natural gas (LNG) is imported. Many markets do not have natural gas (which is typically much more affordable than electricity for hot water, heating and even air conditioning under some circumstances). Average home size and climate can also impact the amount of electricity and natural gas usage, so the assumed constant use per home monthly is not necessarily an accurate representation of cost. Not included are sewage costs, which in some cities exceeds water expense. The study addresses cable TV, but there are almost as many DirecTV subscribers as Comcast users, 19.63 million vs 20.98 million subscribers, respectively according to Statista 2018.
The following table shows typical monthly utility expenses for the 10-most expensive states. Following in the second table are the 10-least expensive states. The most expensive state for typical residential utility costs is Hawaii at $730.86 per month or $8,770 annually. The lowest cost is Idaho, which at $343.71 per month ($4,125 per year) is less than one-half the cost of Hawaii.
While these are estimated averages, they likely deviate significantly across homes. The following table lists these data for all 50 states.
Move.org is an Internet site dedicated to assist people and businesses moving from one location to the next. Data and resources available from move.org includes moving advice, packing tips and hacks, information and reviews of moving products and services and local neighborhood information and resources. They provide numerous studies comparing moving and relocation costs and respective cost of living across the country.
To read the entire move.org study click https://www.move.org/which-states-pay-most-utilities/
Utilities, at an average $422.08 per month, cost the average U.S. household $5,065 per year. A monthly payment of $422.08 would service a fully amortizing loan for 30 years at 5.0 percent for a loan amount of $78,626. Hawaii’s monthly payment of $730.86 would service a $136,146 loan under the same terms. That’s a lot of money.
Utilities can impact where people can afford to reside and how much money they have left to spend on other items.