Homeowners nationwide are being strained financially, but there’s a “hidden” cost that is driving up the cost of property taxes and homeowners insurance premiums — the growing housing density in high-risk areas. Those costs are expected to rise even faster in 2026, Realtor.com said.
Real Estate analytics firm Cotility reports that in the last six years, property taxes have risen 27%, and homeowners insurance now accounts for a record 9% of typical total monthly housing costs.
Cotility’s analysis shows that those pressures aren’t easing anytime soon. It projects that average insurance premiums will jump an additional 8% in 2026, and also in 2027.
“Twelve percent of the residential housing stock is at high risk to a hazard or peril—think about wildfires, winter storms, hail,” Cotality Chief Data and Analytics Officer John Rogers, said recently at ResiDay, an annual real estate conference.
Rogers said that figure is equivalent to $4.3 trillion worth of reconstruction costs, which is the cost to rebuild in the event of a total loss, including materials, labor, and equipment.
Reconstruction Costs Expected to Rise
Cotility said that reconstruction figure is projected to increase to 20% by the year 2050, which is equivalent to $7.2 trillion worth of reconstruction cost.
“Risks from severe weather and climate events are among the factors insurers use to price risk in communities across the country,” Mark Friedlander, Senior Director of Media Relations for the Insurance Information Institute, told Realtor.com. “Consumers in higher-risk communities pay more on average for their property insurance versus those who live in lower-risk areas.”
Joel Berner, Senior Economist at Realtor.com said that many of those high-risk metro areas already are unaffordable.
“Adding on the high insurance premiums each year can make homeownership completely out of reach for many of their citizens,” he said.
Despite those affordability challenges, Anand Srinivasan, CFA, Head of Research and Development at Cotality, told Realtor.com that “more people are flocking to places with extreme weather conditions, like areas prone to flood or fire, or Florida and Hurricane Alley, which has become more highly populated than ever before.”
Based on home affordability, equity, and other metrics, ATTOM released its report on the most recent Housing Risk Report highlights U.S. county-level housing markets that are more or less susceptible to falls in Q2 of 2025. Many of the counties with the highest and lowest risk were found in the South, according to the survey.
Four in Louisiana, seven in Florida, five in New Jersey, and fourteen in California were among the 50 markets with the highest risk, ATTOM said. Affordability, the percentage of mortgages that were significantly underwater, foreclosures, and county unemployment rates were used to calculate risk.
To be considered “very high risk,” a property must have a “perils risk score” of greater than 70. Perils include inland floods, hurricane winds, hurricane storm surges, wildfires, earthquakes, and severe convective storms.
“The cities in the top 10 often experience multiple perils, and in some ways, they can’t catch a break,” Cotility’s Srinivasan said. “For example, Miami experiences flood season, then hurricane season, then fire season—then the cycle starts all over.”
