While the costs of producing a loan are a problem, new studies show how insurance is weighing down homeowners
The cost of producing a mortgage loan has been climbing for years, and the industry has been fighting back on multiple fronts. Credit reporting costs have become a major battleground, with brokers and lenders pushing hard for reform.
Rates and home prices remain the dominant affordability story, but home insurance premiums have also been rising sharply nationwide. New data shows just how much of a burden they have become for homeowners and buyers alike.
A Pew Research Center survey published this month found that 71% of homeowners say the cost of their home insurance has gone up over the last few years, including 42% who say it has gone up a lot.
For mortgage brokers, the insurance crisis is showing up in pre-approval conversations and in deals that fall apart late in the process. Borrowers who can qualify on paper sometimes cannot find a policy they can afford.
Hector Amendola, president of Panorama Mortgage Group, said the issue hit close to home. He recently called to bundle his insurance and was told his property could not be covered at all.
"All of a sudden I call, and they go, 'We can't really insure your property,'" Amendola told Mortgage Professional America. "And just that kind of checked me into place of thinking, oh, this is what new home buyers are going through right now."
Not just a California and Florida problem
The public conversation about home insurance has centered on California, where wildfires have pushed insurers out of the market, and Florida, where hurricane exposure has driven similar exits. Amendola said that framing misses most of the story.
"I think a lot of people think it's only in California or it's only in Florida," he said. "But I think it's happening in a lot of different places for different reasons. Insurance companies are figuring out where they want risk and where they don't want risk and where their biggest upside is."
The Pew survey found that in all four census-designated regions of the country, similarly large shares of homeowners reported cost increases, not a regional outlier problem but a national one.
The Zebra's 2026 State of Insurance: Home report, published in April, puts the average annual home insurance premium at $2,966 nationally, nearly a 6% increase from 2025. In Florida, it averages $9,449 a year, and Oklahoma, Mississippi, Louisiana, and Nebraska all exceed $5,000.
The same report found that 47% of homeowners would struggle to pay their mortgage if premiums rose further, and 74% said home insurance already accounts for a significant portion of their housing budget.
First-time buyers feel the squeeze hardest. Amendola said that when you add insurance increases to already high rates and elevated home prices, the math on affordability stops working for a lot of people.
"When your insurance cost goes up 200% from one year to the next, or in some cases even more than that, it's something to be concerned with," Amendola said.
He said the compounding of costs is what has pushed so many buyers to the sidelines.
"When you look at the credit score, when you look at the hazard insurance, you look at the fact that interest rates are higher, that home prices went up and up and up for so many years, and that's what's really pushed a lot of people out," he said.
Competition could help lower costs
Amendola said the insurance problem is not going to be solved by legislation or regulation alone. More players have to enter the markets that existing insurers are fleeing.
"As more insurance companies enter more markets, I think you'll see that take shape and become a better thing for the consumer," he said. "But right now, what we've seen lately is more of them exiting certain markets. And that's what makes it really tough."
He drew a direct line between what is happening in insurance and what happened with credit reporting. FICO had no real competition for decades, and pricing went where it wanted. Amendola said the insurance market is in the same place right now.
"I probably got lucky going down that road just because I think that the fact that not a lot of companies want to insure in a lot of places is doing the same thing for insurance that has been happening with the FICO score, driving those prices up," Amendola said. "Something has to be done for the folks that are being affected by it.”
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