Are you overpaying for utilities? A state-by-state cost breakdown

Utility costs are often cited as a major source of financial stress for homeowners already struggling to balance their mortgage, maintenance and property tax costs. But is it burdening some homeowners more than others?

For this article, Hometap analyzed data from doxo's 2025 Utilities Insights Report and the U.S. Energy Information Administration to break down average monthly utility costs across all 50 states and identify the factors that most affect what homeowners pay.

Utility costs are one of the most variable and most often underestimated expenses in homeownership. Monthly bills for electricity, gas, water and other services can differ by hundreds of dollars depending on where a home is located, how large it is, and how it's built.

Understanding average utility costs and the factors that drive them can help homeowners budget more accurately and spot when their bills are running higher than they should.

What Drives Utility Costs

Utilities are the essential services that keep a home functional and comfortable, and they make up a significant share of monthly homeownership costs. According to the doxo report, the average American household pays $489 per month for utilities, or $5,868 annually.

That figure varies dramatically depending on a range of factors, from climate to home age to household habits.

Common Utility Types

Utilities typically refer to six primary services:

• Electricity, typically the largest utility expense for most households
• Natural gas, commonly used for heating, water heaters, stoves and dryers, and often a more economical alternative to electric heating
• Water and sewer, which many municipalities bill together
• Trash and recycling
• Internet service
• Cable or streaming services

Average utility costs vary significantly depending on which of these services a home requires and how much of each is used.

Key Factors That Affect Utility Costs

Home Size and Type

A home's square footage directly affects its utility consumption. A 1,000-square-foot apartment requires far less energy to heat and cool than a 3,000-square-foot single-family home. According to residential energy consumption data from the U.S. Energy Information Administration, larger homes typically use 50% to 75% more electricity and gas than smaller residences.

Home type also matters. Single-family homes generally have higher utility costs than townhomes or condominiums, which benefit from shared walls that provide natural insulation. Apartments often have the lowest utility costs due to their compact size and shared building infrastructure.

Geographic Location and Climate

Regional climate plays a major role in determining utility bills. Homeowners in hotter climates face higher cooling costs, while those in colder regions contend with higher heating expenses. States with extreme temperatures on either end of the spectrum typically see higher overall energy consumption.

Regional utility rate differences also affect costs independent of climate. Electricity rates in Hawaii, for example, are more than three times higher than those in Louisiana, even when consumption is comparable.

Seasonal Fluctuations

Utility bills change throughout the year. Summer months often bring higher electricity bills due to air conditioning use, while winter can raise natural gas or heating oil costs. Some utility companies offer budget billing programs that average annual costs into equal monthly payments to smooth out these seasonal spikes.

Energy Efficiency and Home Age

Older homes often have higher utility costs due to outdated insulation, single-pane windows and less efficient heating and cooling systems. A home built in the 1970s might use 30% to 50% more energy than a newly constructed home built to modern efficiency standards.

Energy-efficient upgrades, such as LED lighting, programmable thermostats, ENERGY STAR-certified appliances and improved insulation, can reduce monthly utility expenses.

Average Utility Costs Across the United States

National averages mask significant regional differences. The doxo report put the national average monthly utility cost at $489, but state-level averages range from about $370 to more than $650 per month. Those differences reflect variation in climate, population density, infrastructure age and state-level energy policy.

Average Monthly and Annual Utility Costs by State

The following figures reflect average combined utility costs by state, according to the doxo report.

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Hometap

How to Estimate Monthly Utility Costs

Homeowners and prospective buyers can get a realistic estimate of utility costs using several methods:

• Request historical utility data from the current homeowner or landlord. Sellers in many states are required to disclose this information, and it provides an accurate baseline for future costs.
• Contact local utility providers directly. Many companies can supply average costs for homes of similar size and type in the area, based on their customer data.
• Use online utility calculators that estimate costs based on a home's square footage, number of occupants and location.
• Review current bills when moving within the same area. Existing usage provides a helpful reference point, though it should be adjusted for differences in home size and efficiency.
• Account for lifestyle factors, such as working from home or preferred indoor temperatures, which can meaningfully affect actual costs.

A state's average utility price is a useful benchmark, but individual circumstances ultimately determine a household's cost profile.

Comparing Utility Bills to Local Averages

Once homeowners understand their utility costs, comparing them to local averages can help identify problems or opportunities for savings.

• Gather 12 months of utility bills to account for seasonal variation, since a single month's bill doesn't tell the full story.
• Calculate monthly and annual totals for each utility type, as well as the combined figure, to create clear numbers for comparison.
• Research local averages through a utility provider's website, which often publishes neighborhood comparison data, or use state averages as a starting point.
• Adjust for home size by calculating cost per square foot, dividing total utility costs by square footage for a more apples-to-apples comparison.
• Consider home type and age. Older single-family homes typically cost more to run than newer townhomes, even in the same neighborhood.
• Factor in household size, since more occupants generally means higher water usage and energy consumption.

Utility costs that run 20% or more above local averages, after accounting for these factors, are typically worth investigating further.

What to Do When Utility Costs Are Higher Than Average

Homeowners whose utility bills exceed local norms have several options for reducing costs:

• Schedule a home energy audit. Many utility companies offer free or low-cost audits that identify where a home is wasting energy, using specialized equipment to detect air leaks, insufficient insulation and inefficient appliances.
• Prioritize improvements with the biggest impact first, such as sealing air leaks, adding insulation and installing a programmable or smart thermostat.
• Replace inefficient appliances with ENERGY STAR-certified models. The higher upfront cost is often offset by long-term utility savings.
• Adjust usage habits. Washing clothes in cold water, moderating thermostat settings, taking shorter showers and unplugging unused devices can reduce costs by 10% to 15% without any investment.
• Explore alternative rate structures, such as time-of-use plans that charge less for electricity used during off-peak hours.
• Consider renewable energy options. Solar panels require significant upfront investment but can reduce or eliminate electricity costs over time, and many states offer incentives or financing that lower the barrier to entry.
• Look into utility assistance programs offered by states and utility companies, particularly for seniors and households on fixed incomes.
• Investigate water-saving fixtures, such as low-flow showerheads, faucet aerators and high-efficiency toilets, which can reduce water and sewer costs with minimal impact on daily comfort.

Reducing utility costs can lower a household's environmental footprint as well as its monthly expenses.

Utilities Within the Broader Cost of Homeownership

Utilities represent only one piece of the homeownership expense picture. Between mortgage payments, property taxes, insurance, maintenance, utilities and unexpected repairs, the total cost of owning a home often exceeds what many buyers initially budget for.

Understanding the full range of ongoing homeownership costs, not just utilities, is an important part of long-term financial planning for both prospective and current homeowners.

This story was produced by Hometap and reviewed and distributed by Stacker.