Rising insurance costs reduced in the affordability of the buyer

For existing homeowners, and those who want to become homeowners, this means that from September 2024 32% of the average mortgage payment of single -family homes went to real estate tax and insurance, according to facts from the Intercontinental exchange. This is the highest percentage that has been recorded since Intercontinental Exchange started keeping track of this data in 2014.

In Louisiana, from mid -August 2025, an average of 18.2% of the monthly mortgage payment of a homeowner only went to insurance, according to data from Broker.com. Florida (17.0%), Oklahoma (14.7%), Mississippi (11.2%), Alabama (11.1%), Texas (10.3%) and Nebraska (10.0%) the top seven.

Researchers at New York University, Rice University and the Federal Reserve Bank of Dallas believe that this rate is increasing are responsible for another 149,000 mortgages delinquent Between mid -2022 and mid -2023, otherwise would have remained stable.

Replacement costs shot up

According to the Insurance information Institute (Iii) There are various factors that contribute to the rising insurance premium costs.

“A large engine of insurance premiums is replacement costs,” says Mark Friedlander, the director of business communication at III. “We have conducted a study that looked at cumulative replacement costs for a period of four years. If we look at 2019 to 2022, we saw a cumulative replacement costs increase of 55%-that is almost four times the increase in the consumer price index in the same period.”

Friedlander attributes a lot of this increase to the disruption of the supply chain and labor deficits caused by the pandemic. Data from the III shows that replacement costs have been moderated in recent years and that the organization projects a low increase in a single figures in replacement costs.

Natural disasters and population shifts play a part

Another engine of rising insurance premium costs, according to the III, are the population shifts that take place nationally.

“More people live in danger than ever before,” says Friedlander. “We see the greatest growth in coastal areas in particular – Texas, Florida, some Southeast States – more people moving to areas susceptible to the land of hurricanes. When you endanger more people, as the costs for the rebuilding increase, that will also increase your costs.”

In 2023 there were 28 weather disasters that cost $ 1 billion or more. While large weather conditions such as hurricanes and forest fires are often in the spotlight, insurance experts note that some of the most expensive disasters include large thunderstorms and convective storms that can occur everywhere in the country.

Data from the III shows that $ 60 billion in damage was caused by serious convective storm losses in 2023, higher than all combined hurricane damage from that year.

“We see an increase in the number and seriousness of convective storms,” ​​Lauren Menuey, the director of Goosehead Insurance Agencysay. “Those storms have really strong wind, severe thunder and lightning and really big hail, and the hail gets bigger. What may have been a storm with only a few years ago, is now a storm with a baseball and the losses are much greater.”

There is good news

Although insurance experts only expect insurance premiums to rise, there is good news.

“Earlier this week the 15th new insurer Florida arrived. This is more than any other state,” says Friedlander. “We have seen that legislative reforms in Florida have been adopted, and the State has shown a large change in comparison with the risk crisis with which the state has been confronted for so many years.”

Friedlander says that Florida registered the lowest average premium increase (1.7%) in the country in 2024 because of these changes.

But Florida is not the only state experiencing some relief, Menuey says that rates throughout the country are starting to stabilize.

“Carriers come to a point where they start to feel a little more stable, but to get there, they have taken several tariff increases in the last 24 months, many of which have increased double digits,” Menuey said. “Although consumers can still see a number of increase if their policy renewal cycle catches up the rises, depending on the wearer they are, they could see that those increases are starting to go to Q4 this year and next year to Q4.”

Although this is good news, Sean Kent, the Senior Vice President of Insurance at First service Financial/FS Insurance BrokersHas some worries.

“It’s great that the rates are falling and that we see more interest from carriers in places that were in the past, but you have to be aware of them Am the best rating“Says Kent.” There are many newer carriers who want to fill a void, and I think homeowners should just be a little smarter and understand who the courier is and how financially stable they are. ”