27% of Mortgage Holders Break an Important Spending Rule. Here's 1 Thing That Can Help

High housing costs are negatively impacting millions of Americans, and the latest data shows that many of them may be stretching their budgets to the limit.

U.S. Chamber of Commerce data shows that 27% of homeowners spend more than 30% of their income on housing costs.

Most experts recommend keeping your housing costs below that threshold, but many Americans can't avoid breaking the financial rule as home prices and homeowners insurance costs have soared.

Mortgage costs have ballooned

Most everyone knows that home prices are expensive these days, but it can be challenging to wrap your head around just how much more expensive they've become over the past few years. Here's why so many homeowners are stretching their budgets just to pay for their homes:

• House prices have increased 47% since 2020
• Homeowners insurance is 20% more expensive than in 2022
• Median single-family home property taxes spiked 25% since 2019

All of these factors contribute to a homeowner's monthly mortgage payment, and they're all unavoidable. Even if you paid for your home in cash, you're still likely paying more for insurance and taxes than you were several years ago.

In addition to these high costs, rising mortgage rates over the past few years have made buying a home more expensive. Thankfully, interest rates have started to cool down, and many economists are hoping for more relief later this year.

But for current homeowners potentially having a hard time making ends meet, lower interest rates may not be the answer to improving your financial situation. Instead, you may want to reconsider your insurance provider.

Insurance could jump another 6% this year

When I bought my first house, I never once considered what homeowners insurance company to use, how much the cost was each month, or whether I should shop around for a better deal.

I likely overpaid for years because I didn't spend a few minutes comparing quotes.

So, believe me when I say you're in good company if you've never thought about changing your homeowners insurance. But with costs increasing, now is a good time to consider doing so. The National Association of Realtors says the average annual homeowners insurance premium is $2,377 annually, up 20% from two years ago -- and it could rise another 6% by the end of this year.

So, that's the bad news. The good news is that you can do something about it. Consumer Reports recently said that with home and auto insurance costs rising, it doesn't hurt to shop around for both every year.

You're not guaranteed to find a lower premium, but comparing providers online will help you determine whether you're overpaying for your current policy. Here are a few factors to keep in mind when you're comparison shopping:

• Compare quotes from at least three insurance companies
• Make sure the coverage you are comparing is the same
• Consider reducing your homeowners insurance to lower your premiums

Whether you switch or not, bundling your home and auto insurance is often a good idea to maximize your savings. Some insurance providers give a discount of up to 25% for doing so. With car insurance costs up 26% in the past year alone, it's worth looking into.

If you can shave just $25 per month off your homeowners insurance, you'll save $300 every year.

While you can't do much about high housing costs, you can control some of your expenses by getting a few insurance quotes. Or, you could be like me and stick with the same insurance provider for far too long before making the decision to shop around. Lesson learned.