According to a recent Realtor.com survey, nearly half of recent and potential homebuyers have experienced or anticipate experiencing difficulties obtaining or renewing homeowners insurance, as over one in four homes in the U.S.—representing $12.7 trillion in real estate value—are at risk of exposure to severe or extreme climate risks.
According to the survey, 42% of respondents have already acknowledged that their house insurance premiums have increased, and 88% of respondents think they will eventually have to pay more for their coverage. Remarkably, 75% of respondents think that homeowners insurance may eventually become too expensive.
Some 58% of recent and potential purchasers responded to the study by saying that if the cost of homeowners insurance increased, they would or are likely to forgo it—some have already done so. Even though many Gen Z purchasers are using a mortgage and are therefore probably compelled to obtain homeowners insurance, this number rises to 76% among these young buyers. An additional 65% of respondents expressed concern about getting and keeping homes insurance.
“Homeowners insurance offers financial protection for consumers that may help cover damage to homes and personal property from an extreme weather event or fire, while also providing personal property and liability coverage,” said Danielle Hale, Chief Economist at Realtor.com. “But these benefits come with an upfront cost that has risen as weather events have become more frequent and impactful and rebuilding costs climb. Homeowners are looking for strategies to lower costs including adjusting their home searches and potentially short-charging or forgoing coverage altogether.”
| Gen Z | Gen Y | Gen X | Baby Boom | |
| Completely changed strategy based on insurance challenges | 30.5 % | 25.9 % | 19.9 % | 5.9 % |
| Expanded initial target geography | 32.5 % | 32.2 % | 32.8 % | 15.8 % |
| Eliminated some desired locations | 35.8 % | 36.0 % | 33.2 % | 25.7 % |
| No impact yet, but expect it will in the future | 18.5 % | 19.3 % | 23.7 % | 32.2 % |
| No change | 15.9 % | 16.0 % | 14.9 % | 32.9 % |
How Homeowner’s Insurance is Hindering Americans
One third (33.7%) of home searchers have been compelled to entirely alter the geographic location in which they are looking for a home due to insurance issues, and another 30% have broadened their search and extended their initial target territory. Due to insurance issues, over 25% of home searchers have entirely altered their tactics.
Furthermore, just 30% of respondents have examined the natural disaster risk information for their current or potential residences, despite 44% intending to do so in the future.
Compared to other generations, particularly baby boomers, who reported that only 6% of them had entirely altered their homebuying strategy and 15% had broadened their initial search, Gen Z home searchers are more likely to have taken some kind of action during their search to potentially mitigate against homeowners insurance challenges.
| Definitely applies | Probably applies | Does not apply | |
| Homeowners insurance has risen in cost over the past 2 years | 42.1 % | 31.3 % | 26.6 % |
| Expect to pay more for homeowners insurance in the future | 45.2 % | 43.3 % | 11.5 % |
| Faced recent challenges obtaining homeowners insurance | 20.7 % | 27.9 % | 51.4 % |
| Faced recent challenges renewing homeowners insurance | 20.1 % | 27.5 % | 52.4 % |
| If the cost of homeowner insurance continues to rise, it could become unaffordable | 31.2 % | 44.1 % | 24.7 % |
| Would consider foregoing homeowners insurance if the costs became too high | 23.6 % | 35.1 % | 41.3 % |
| Worried about obtaining or maintaining homeowners insurance | 27.2 % | 38.0 % | 34.8 % |
A recent Realtor.com analysis states that severe climate hazards, like as flooding, wildfires, or hurricane wind damage, affect 26% of houses in the United States, which is worth $12.7 trillion. Homeowners in high-risk areas face increased financial burden as a result of these extreme climate threats, which raise insurance costs.
The average homeowner in Miami presently pays yearly premiums for single-family homeowners with HO-3 policies, the most popular kind of homeowners insurance policy in the United States, which equal 3.7% of the home’s market value. This is the highest ratio among the 100 largest metro areas in the country.
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