Americans are expected to spend more money on heating their homes this winter than on holiday gifts, according to new research.
The increased cost of staying warm indoors amid cold outdoor temperatures comes after an unusually hot summer, causing families to spend a larger portion of their budgets cooling costsCompared to previous years, according to a report From the National Energy Assistance Directors Association (NEADA).
On average, home heating costs this winter are projected to increase 8.7% to $941, up from $866 last winter. The increased costs are partly attributed to cooler temperatures expected in Northeastern and Midwestern states.
The new average spending on heating costs exceeds the $902 that the average family expects to spend on Christmas gifts this year, according to a forecast From the National Retail Federation.
What is causing home heating costs to rise?
There are various ways to keep residences warm. Households that use electricity to heat their homes are expected to face the biggest increase in costs – more than 14% – which will reach a total of $1040 to $1,189 from mid-November to mid-March, Which NEADA considers as winter period. ,
Prices are rising due to the rising costs of updating and maintaining the electricity grid. Also, cooler weather is expected to increase consumption.
“It's cold, and the cost of electricity has gone up because of the rebuilding of the grid. So we're seeing both higher prices and higher usage,” NEADA Executive Director Mark Wolfe told CBS MoneyWatch.
Difference in cost of natural gas, propane and heating oil
Natural gas and propane users are also likely to be hit with big bills this winter. Heating costs for natural gas are up just over 3%, with the average cost for the winter period being $634, compared to $615 for 2023–2024. Costs are expected to increase marginally in line with wholesale prices.
Propane costs have increased 4.4%, with households expected to spend an average of $1,231 to heat homes, up from $1,179 last season.
In contrast, the cost of heating oil has declined 2.7%, meaning the average expense this winter will be $1,518, down from $1,560 last winter.
Early start to the season
November was colder than normal, Wolfe said, with temperatures dropping prematurely due to “very expensive heat” that put a strain on cooling resources.
He said that climate change should be held responsible for large fluctuations in temperature.
“Weather conditions can be very unpredictable, even though winters are getting warmer and summers are getting longer over time,” Wolfe said. “It's not a straight line and for consumers, that's quite troubling because “High utility bills are coming right before Christmas.”
Now steps have to be taken
There are some steps consumers can take to help keep home heating costs under control.
Wolfe urges people to get their thermostats repaired before the coldest temperatures of the season arrive. This way, families won't have to worry about emergency repairs if their thermostat breaks during cold weather. The tune-up will also help the heating system run more efficiently, he said.
Wolf recommends always keeping the furnace flue closed, otherwise heat will escape from the home. Finally, to save up to 10% on your energy bill, turn down the heat manually at night, if you can.