ICE Mortgage Technology has released its September 2025 ICE Mortgage Monitor Report, highlighting the continued surge in property insurance costs and its growing impact on overall mortgage affordability.
The September 2025 ICE Mortgage Monitor Report found that the average annual property insurance payment for single-family mortgage holders has climbed to nearly $2,370 per year, accounting for 9.6% of average monthly mortgage-related expenses when factoring in principal, interest, taxes, and insurance (PITI). This marks the highest share on record and underscores the disproportionate role insurance costs are playing in rising homeownership expenses.
“Property insurance costs continue to be the fastest growing subcomponent of mortgage payments among existing homeowners,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “While mortgage principal, interest and property tax payments have all increased in recent years, insurance has far outpaced those gains, rising 4.9% in 2025, 11.3% annually and nearly 70% over the past five-and-a-half years. That rapid escalation now means insurance alone consumes almost $1 in every $10 spent on average mortgage-related costs.”
Key Findings on Property Insurance Rate Trends
- Slower but steady growth: Average property insurance payments rose 4.9% in the first half of 2025, pushing annual costs up 11.3% year-over-year. While this is down from the 7.3% increase seen over the first half of 2024, it still represents a historically high growth rate.
- Insurance costs vs. other mortgage components: Over the past five years, property insurance costs have surged +70%, compared to increases of +23% for principal, +27% for interest, and +27% for property taxes.
- Cost per $1,000 of coverage: The average cost rose by $0.29 (5%) over the past 12 months, and by $0.85 (16%) since 2022, showing that rising premiums are not only a function of higher home values, but also higher costs of coverage itself.
- Geographic disparities: California saw the largest increases in the first half of 2025, with premiums in Los Angeles up 9% in just six months and 19.5% year-over-year. In contrast, Florida—historically among the highest-cost states for property insurance—saw some moderation, with smaller increases and even declines in certain markets.
- State-backed plans: Florida has experienced a sharp reduction in homeowners relying on state-backed insurance plans, dropping from 25% to 16% over the past 18 months, while reliance on such plans continues to rise in states like California and North Carolina.
“As property insurance costs continue to climb and account for a larger share of monthly mortgage expenses, homebuyers and homeowners are facing increased affordability pressures,” said Tim Bowler, President of ICE Mortgage Technology.
Measuring Regional Trends
As homeowners nationwide face steep insurance costs, with premiums rising 21% from 2021 to 2023, a recent report from First American found that translated to roughly $300 more per year per policy on average, outpacing both income growth and inflation and threatening the financial stability that homeownership typically represents. This surge has been driven by a “perfect storm” of rising natural disaster risk, soaring construction costs, and higher claim payouts, reshaping the home insurance landscape nationwide.
According to the National Oceanic and Atmospheric Administration (NOAA), the annual number of billion-dollar disaster events has tripled—from an average of seven per year (1980-2019) to 23 annually from 2020-2024. Both 2023 and 2024 set records, with 28 and 27 such events, respectively. The annual cost of these disasters has risen from $55 billion to $151 billion.
The South has borne the steepest increases. Among the 50 largest U.S. metro areas, eight of the 10 cities with the fastest-growing premiums are in this region. In 2023, Southern homeowners paid an averageNational Oceanic and Atmospheric Administration (NOAA) of $2,120 annually, compared to $1,575 elsewhere. In New Orleans, premiums spiked 51% from 2021 to 2023, adding $1,200 in annual costs and pushing the average above $3,500. Other Southern cities also saw substantial jumps: Jacksonville (38%), Tampa (33%), Orlando (31%), and Birmingham (27%). Even inland areas like Richmond (25%), Atlanta (24%), and Houston (22%) reported steep increases due to tornado, hail, and wind damage.
Recent data from Redfin reveals $51.7 billion worth of homes in the city of Los Angeles—or roughly 11,000 residential properties—were impacted by the wildfires in January. For the study, the Los Angeles City Council shared a list of 11,125 residential parcels in the city of Los Angeles that were inspected by the Los Angeles Department of Building and Safety after the wildfires. Redfin was able to match nearly 11,000 of those parcels with Redfin property value estimates as of December 2024—the month before the fires. Many, but not all, were completely destroyed by the fires. Most of the properties Redfin analyzed were single-family homes.
Most homes in this analysis were impacted by the Palisades Fire, which is estimated to be the third most destructive wildfire in California history, according to the California Department of Forestry and Fire Protection (Cal Fire). The fire made news for destroying homes in the high-end Pacific Palisades neighborhood, but many other areas were also devastated in January fires. Please note that this analysis excludes the impact of the Eaton Fire, which impacted the Los Angeles suburb of Altadena, meaning the total value of homes destroyed in the January fires far exceeds $51.7 billion.
Click here for more on ICE’s analysis of insurance premiums nationwide.
