New report shows average annual insurance payment skyrocketed again in the first half of the year, only adding to affordability woes
Property insurance costs for US homeowners with mortgages climbed to a new record in the first half of 2025, according to the latest ICE Mortgage Monitor report. The average annual insurance payment on a mortgaged single-family home jumped 11.3%, or $20 per month, compared to last year, pushing the typical bill to nearly $2,370. That figure now represents 9.6% of average mortgage-related expenses, the highest share on record.
The report found that insurance now accounts for 9.6% of average mortgage-related expenses, the highest share ever recorded. Over the past five and a half years, the average property insurance payment has risen by nearly 70%, more than double the increase for principal, interest, and taxes.
“It’s not just rising home prices, but also the rising cost of insurance coverage impacting homeowners across the US,” the report said. ICE analysts flagged that while interest payments rose 8% year-over-year, property insurance costs outpaced all other components, with principal payments up just 1% and property taxes up 5%.
Regional disparities widen
Florida and Gulf Coast borrowers, long accustomed to high premiums, saw some relief as legislative changes encouraged private insurers to return and reduced the share of homeowners relying on state-backed insurance plans.
In Miami, the share of mortgage holders on state-backed policies dropped from 46% to 27% in 18 months. “Legislation in Florida aimed at reducing frivolous insurance-related lawsuits has contributed to a sharp reduction in the number of Florida homeowners on state-backed insurance plans,” ICE said.
Meanwhile, California homeowners faced the sharpest increases, with Los Angeles premiums up 9% in just six months and nearly 20% year-over-year, largely due to wildfire risk.
San Diego, Oxnard, Bakersfield, Riverside, and San Francisco all saw double-digit annual jumps. “Parts of North Carolina and South Carolina, heavily affected by flooding last year, also saw sharp rises,” the report noted.
Steve Marks, president and CEO of Ohana Mortgage Solutions, previously told Mortgage Professional America that "it's an increasing phenomenon" due to climate change. “A lot of these insurance companies on condos are having to increase master policy premiums for hurricane insurance. In some cases, they're doubling or tripling in premium cost."
Despite these spikes, California markets still ranked among the lowest nationwide for insurance costs per $1,000 of coverage, while every major market in Louisiana and Florida remained among the most expensive.
Broader mortgage pressures persist
The surge in insurance costs comes as mortgage holders face a complex landscape. Delinquency rates fell to 3.27% in July, well below pre-pandemic levels, but foreclosure starts rose 7.6% year-over-year. Home affordability improved modestly, yet the payment-to-income ratio remains above long-term averages, and for-sale inventory growth has stalled.
