Rising energy costs are adding pressure to household budgets across the United States, with the typical household spending approximately $295 per month on utilities, according to a new analysis from LendingTree. Electricity and natural gas prices have increased significantly faster than overall inflation over the past decade, creating additional affordability challenges for renters and homeowners.
The analysis, based on 2024 U.S. Census Bureau data, found that average monthly utility expenses reached $294.66. Electricity accounted for the largest expense at $198.08 per month among households paying separately for the service, followed by natural gas at $113.74, water at $106.47, and other home heating fuels at $60.01.
Utility Costs Vary Significantly Across Markets
Utility expenses differ considerably depending on geographic location, with some metropolitan areas experiencing substantially higher costs than others. Fresno, California, recorded the highest average monthly utility expenses at $409.63, followed by Boston at $370.59 and Birmingham, Alabama, at $364.03. Denver reported the lowest average at $238.19.
The impact on household budgets is also significant. Fresno residents spend approximately 6.6% of their metropolitan area's median monthly household income on utilities, the highest share among the 50 metropolitan areas examined. Birmingham followed at 5.8%, while Memphis, Tennessee, recorded 5.7%.
Although average monthly utility expenses declined slightly by $1.68, or 0.6%, nationwide in 2024 compared with the previous year, costs increased in 24 of the 50 metropolitan areas. San Jose, California, experienced the largest increase at 8.7%, followed by Birmingham and Charlotte, North Carolina, at 7.7% each.
Energy Prices Continue to Outpace Inflation
Long-term price trends highlight the growing financial burden of household energy consumption. Between 2016 and 2025, natural gas prices increased 59.1%, while electricity prices climbed 41.1%. Both significantly exceeded the 34.1% increase in overall consumer prices during the same period.
The sustained rise in energy costs adds another layer of financial pressure for households already managing housing, transportation, and other essential expenses. For rental housing operators, higher utility expenses also underscore the importance of monitoring operating costs and understanding how affordability pressures affect residents.
Managing Higher Household Utility Expenses
LendingTree recommends that consumers explore alternative utility rate plans, consider budget billing arrangements to manage seasonal fluctuations, and review statements for potential billing errors. Households experiencing payment difficulties are also encouraged to contact utility providers early to discuss payment arrangements and available assistance.
State and local energy-assistance programs may provide additional support, particularly ahead of periods of higher heating and cooling demand.
As electricity and natural gas prices continue to rise faster than inflation, utility expenses remain an important component of the broader U.S. housing affordability conversation, affecting both household budgets and the financial considerations surrounding rental housing.
Source: ConsumerAffairs
