Realtor.com reports that more than one in four U.S. homes—representing $12.7 trillion in real estate value—are exposed to severe or extreme climate risks. The report highlights how flood, hurricane wind, and wildfire threats are reshaping housing markets, homeowner costs, and insurance availability nationwide.
“Climate risks are no longer a distant threat for U.S. housing—they are a present reality that put a large chunk of U.S. real estate value at risk,” said Danielle Hale, Chief Economist at Realtor.com. “In many markets, the gap between perceived risk and actual risk is sizable, particularly for flooding. This has significant consequences for homeowners, buyers, and insurers, and it underscores the need for readily available data to help households make informed decisions.”
One of the most underestimated hazards in the housing market is flood risk, as nearly six million homes, valued at $3.4 trillion, are likely to experience severe or extreme flooding over the next 30 years, according to First Street’s Flood Factor score data found on Realtor.com. The $3.4 trillion in property value is approximately two million higher than the number of homes located in FEMA’s Special Flood Hazard Areas (SFHAs), largely because FEMA’s maps do not fully reflect heavy rainfall or the effects of climate change.
Within the 100 largest metros, New York, Los Angeles and San Francisco are the top metros where the biggest gap in dollar terms was reported, between homes in FEMA SFHAs and homes facing severe or extreme flood risk, by $95.3 billion (New York), $65.6 billion (Los Angeles), and $54.9 billion (San Francisco). By gap in share of market value, New Orleans leads the nation with 66 percentage points of its housing stock at severe or extreme flood risk but not identified by FEMA SFHAs, followed by Palm Bay, Florida, at 15 percentage points and Chattanooga, Tennessee, at 11 percentage points.
Coastal markets dominate the list of metro areas with the greatest dollar value and share of dollar value exposed to severe or extreme flood risk.
In 2025, approximately 18.3% of homes in the United States, valued at nearly $8 trillion, faced severe or extreme risk of wind damage, according to First Street’s Wind Factor score data available on Realtor.com. In 14 major metros across Louisiana, Florida, South Carolina, and Texas—including Miami, Houston, Tampa, and New Orleans—every home is exposed to severe or extreme risk of wind damage. Because these risks frequently overlap with flood exposure, homeowners in coastal markets face compounded threats. Financially, the burden is amplified by high hurricane deductibles; in many states, homeowners with a $400,000 policy may need to cover as much as $20,000 in damage before insurance kicks in.
Yet another climate risk on the rise, wildfire exposure, while geographically concentrated, represents a significant and growing challenge. In 2025, 5.6% of homes valued at approximately $3.2 trillion, faced severe or extreme wildfire risk, according to First Street Fire Factor score data available on Realtor.com. California alone accounts for nearly 40% of this total, or $1.8 trillion in property value, with Los Angeles and Riverside among the most exposed metros. The state’s insurance market is under severe stress: California’s FAIR Plan, designed as a last-resort option, has grown to $650 billion in total exposure, up 289% since 2021.
According to a recent report from global property data provider Cotality, wildfires, once confined to a so-called “wildfire season,” are now an ever-present threat. The 2025 Cotality Wildfire Risk Report: Priced Out & Burned Out, reveals that more than 2.6 million homes in the Western U.S., representing a combined reconstruction cost value (RCV) of $1.3 trillion, face moderate or greater risk of wildfires, with more than one million of those homes deemed “very high risk.”
Outside California, wildfire risk is also acute in western metros such as Colorado Springs, where more than three-quarters of home value is vulnerable, and Tucson, where 60 percent of housing stock faces high fire danger.
Rising insurance costs are amplifying the financial strain on homeowners in these high-risk areas. In Miami, for single-family homeowners under a HO-3 policy, the most common type of homeowners insurance policy in the U.S., the typical homeowner now pays annual premiums equal to 3.7% of the home’s market value—the highest ratio among the nation’s 100 largest metros.
New Orleans follows closely at 3.6%, with Cape Coral, Florida, at 2.2%. Florida cities dominate the list of expensive insurance markets, with Tampa, Palm Bay, and North Port all ranking among the top 10. These burdens come on top of structural gaps in coverage: flood insurance is typically sold separately, hurricane deductibles are significantly higher than standard policies, and wildfire coverage in many regions is either limited or unaffordable.
The nation’s homeowner’s insurance market has come under heavy pressure as the number of climate-related including wildfires grows annually.
While a national issue, California’s homeowner’s insurance market specifically is under growing financial pressure following January’s catastrophic Eaton and Palisades wildfires, which caused an estimated $52.5 billion in economic losses and affected approximately 18,000 structures, among which included 11,300 homes, (90% of which were absolutely destroyed). The fires also claimed 29 lives, making them among the costliest wildfires in U.S. history.
According to a recent study by Harvard’s Joint Center for Housing Studies, signs of a deteriorating private insurance market preceded the fires. According to a Federal Insurance Office (FIO) report, private homeowner’s insurance nonrenewal rates between 2018 and 2022 in fire-hit ZIP codes like Altadena (91001) and Pacific Palisades (90272) surpassed both California’s statewide average (1.3%) and the national average (1.2%), reaching 1.7% and 1.8%, respectively, in 2022.
Premiums in these high-risk areas also rose well above inflation during the same period. In Pacific Palisades, the average annual homeowner’s insurance premiums climbed 33% above inflation, from $5,025 to $6,689. In Altadena, they increased 26% above inflation, from $1,485 to $1,873.
As private insurers have pulled back from riskier markets, California’s Fair Access to Insurance Requirements (FAIR) Plan, which is the state’s insurer of last resort, has seen unprecedented growth. California’s insurance commissioner recently approved a 17% rate increase for State Farm, the largest homeowner’s insurer in the state, amid what was described as a “statewide insurance crisis.”
In Pacific Palisades and Altadena alone, FAIR Plan policies more than doubled between 2021 and 2024, growing from 1,184 to 2,388. Following the fires, the FAIR Plan received about 5,000 claims and is now facing an estimated $4 billion in total losses. To remain solvent, the plan will assess $1 billion in emergency fees on its member insurers, marking the first emergency assessment in more than 30 years. Half of those fees can be passed on to consumers (private insurers and policyholders across the state).
“Climate risk and insurance are not usually a top consideration for home shoppers balancing budgets against still-high home prices and mortgage rates, but these factors already shape ongoing housing costs and affordability, and increasingly whether they can secure affordable insurance coverage,” added Hale. “While the types of risk vary by region—flooding in the Northeast, wildfires in the West, and hurricanes in the South—the financial consequences are increasingly national in scope.”
Click here for more on Realtor.com’s examination of climate risk and its impact on the housing market.
