Fifty-eight percent of respondents said they would consider forgoing insurance if costs soared
Concerns about rising homeowners insurance costs are spreading among US homebuyers. A recent Realtor.com survey found that 75% of buyers worry insurance could soon be unaffordable, and nearly half have already had trouble getting or renewing coverage.
The survey of 1,000 recent or prospective buyers conducted between August 7 and 8 showed that 42% have seen their insurance costs go up, and 88% expect to pay even more in the future.
“Homeowners insurance offers financial protection for consumers that may help cover damage to homes and personal property from an extreme weather event or fire, while also providing personal property and liability coverage,” Danielle Hale, chief economist at Realtor.com®, said.
“But these benefits come with an upfront cost that has risen as weather events have become more frequent and impactful and rebuilding costs climb. Homeowners are looking for strategies to lower costs including adjusting their home searches and potentially short-charging or forgoing coverage altogether.”
Climate risks drive insurance worries
Realtor.com’s recent report found that 26% of US homes, representing $12.7 trillion in value, face severe risks from flooding, wildfire, or hurricane winds. In high-risk metros like Miami, annual premiums for the most common HO-3 policy now average 3.7% of a home’s market value. This is the highest among the nation’s 100 largest cities. These rising costs forced 34% of buyers to change their target geography, while nearly a quarter have overhauled their search approach entirely.
Two million more homes are at serious risk of flooding than federal maps show, mainly because these maps don’t consider heavy rainfall or climate change. New York has the biggest gap between official flood zones and real flood risk, with $95.3 billion in extra property at risk.
Hurricane winds threaten 18.3% of US homes, valued at almost $8 trillion. In 14 major metro areas, especially in Louisiana, Florida, South Carolina, and Texas, every home faces severe wind risk. Homeowners in these places may have to pay up to $20,000 out of pocket before hurricane insurance kicks in.
Wildfires, though more localized, endanger 5.6% of homes worth $3.2 trillion. Nearly 40% of this risk is in California, where $1.8 trillion in property is exposed.
Younger buyers most likely to adapt
Gen Z buyers are particularly responsive, with 31% having completely changed their homebuying strategy due to insurance challenges, compared to just 20% of Gen X and 6% of Baby Boomers.
Fifty-eight percent (58%) of all respondents said they would consider forgoing insurance if costs soared, a figure that jumps to 76% among Gen Z, even though most are required to carry coverage for their mortgages.
Despite the heightened risks, only 30% of buyers have researched natural disaster data for their homes, though 44% plan to do so. Industry experts have urged mortgage professionals to proactively educate clients about insurance requirements and climate risk.
Rising insurance and hidden fees drive up cost of homeownership
The Realtor.com® survey results came in the wake of the latest ICE Mortgage Monitor report that found that property insurance costs for US homeowners with mortgages hit a record high in the first half of 2025. The average annual insurance payment for a mortgaged single-family home rose 11.3%, or about $20 more per month, compared to last year. This brings the typical yearly bill to nearly $2,370. Insurance now makes up 9.6% of average mortgage-related expenses, the highest share ever recorded.
Over the past five and a half years, average property insurance payments have increased by nearly 70%, which is more than twice the rate of growth for principal, interest, and taxes.
Similarly, hidden costs of US homeownership now average more than $21,000 annually, according to a new report by digital insurance platform Insurify. Expenses beyond mortgage payments, including home and flood insurance, property taxes, utilities, and maintenance, amount to $21,084 a year. That represents 27% of the nation’s median household income of $77,719.
