25% of Homeowners Have No Savings for Emergency Repairs
Home repairs and maintenance are tremendous expenses of homeownership, yet many homeowners are unprepared to handle the costs. Twenty-five percent of American homeowners have no money set aside to cover the cost of an emergency home repair, according to the inaugural HomeServe Biannual State of the Home survey from HomeServe USA (HomeServe), a leading provider of home repair solutions and turnkey energy-related services. Of those who do have money set aside, 52 percent have $1,000 or less available.
This is the first edition of the HomeServe Biannual State of the Home, a new biannual report on the financial impact of home repairs and energy use facing American homeowners. The poll was conducted online by Harris Poll on behalf of HomeServe in July 2015, among over 1,200 U.S. homeowners ages 18 and older.
Homeowners’ lack of emergency funds is concerning because over the past 12 months nearly half (48 percent) of American homeowners reported a home emergency. The most common home emergency was a faulty heating or air conditioning system, with a fifth (20 percent) needing to repair or replace one of these systems, followed by plumbing issues including blocked or overflowing toilets or sinks (13 percent and 10 percent, respectively).
Other household emergencies reported by American homeowners over the past twelve months include leaking water pipes (9 percent); a faulty electrical circuit, switch or outlet (9 percent); and issues with a water heater that required a repair or a replacement (8 percent).
“Many homeowners make the mistake of not factoring the cost of home repairs and maintenance into their budgets,” said Tom Rusin, CEO of HomeServe USA. “If they don’t take steps to proactively protect themselves, unexpected repairs can wind up putting a major strain on homeowners’ finances.”
Another costly expense of home ownership is monthly utility bills, which can add up, particularly during the summer and winter seasons. Though it varies greatly by state, the average cost of monthly home energy bills across electricity, natural gas and home heating oil in 2015 is $174.78, according to data from WalletHub. Looking forward, HomeServe’s survey found that 46 percent of American homeowners expect their home energy costs to stay the same, while 40 percent expect it to increase in the next 12 months. Only 9 percent expect to see their energy bills dip in the next year.
With most homeowners expecting home energy costs to remain flat or rise, many are seeking ways to make their homes more energy efficient — conserving energy and lowering their bills. As noted earlier, 20 percent of homeowners needed to repair or replace their heating or air conditioning system — these homeowners likely got the benefit of improved efficiency with equipment upgrades. The survey found that seventy-one percent of American homeowners are planning to take proactive steps to make their home more energy efficient in the next 12 months. The most common steps homeowners plan to take are regularly changing filters in the central HVAC unit (47 percent), adjusting the thermostat a few degrees warmer in the summer or cooler in the winter (42 percent) and replacing CFL light bulbs with LED light bulbs (35 percent). Homeowners also plan to utilize technology, solar power and professional assistance to improve their home’s energy profile by upgrading to a smart thermostat (9 percent), installing solar panels (5 percent), and getting a professional energy audit (4 percent).
“American homeowners are becoming increasingly conscientious about energy usage as they recognize the benefit to their wallets,” said Rusin. “We expect to see an increase in demand for easy and inexpensive solutions to help homeowners assess their usage, adjust their equipment and save on energy costs.”
