The US housing market is about to see a turnaround in the coming months, according to an industry expert.
Homeowners could see insurance premiums jump another 16% over the next two years due to rising natural disasters and rebuilding costs.
The average homeowner’s insurance premium is expected to increase by 8% in 2026, followed by another 8% in 2027, real estate analytics showed at the annual real estate conference.
Chief Campaign Officer and Chief Analytics Officer, John Rogers, which has been on the rise “over the last few years, with some areas seeing double-digit growth.
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Roger said that insurance now costs 9% of the average US homeowner’s payment, which is “the highest rate on record for a person’s output in terms of principal, interest, property taxes and insurance premiums.”
Danielle Hale, chief economist at Realtor.com, told FOX Business that higher rebuilding costs, a reflection of overall inflation and certain housing supply trends, are driving higher premiums.
Premiums for the average homeowner’s insurance are expected to increase by 8% in 2026, followed by another 8% in 2027. (Pet Pictures)
Hale also said that “the more frequent disasters have resulted in more damage and increased claims, the insurance trends are trying to get ahead of it.”
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Research by Reelror.com revealed that “a significant chunk of the American housing stock” actually faces the risk of severe or extreme weather, ranging from more than flooding, 6% of wind risk, according to Hale.
Danielle Hale, chief economist at Realtor.com, told FOX Business that higher rebuilding costs are driving the higher premiums. (Patrick T. Fallon/AFP via Getty Images)
Billions of dollars worth of real estate is being exposed to significant risk, Hale said.
According to a September report, Realtor.com noted that coastal markets dominate the list of Metro areas with the largest dollar amount exposed to high or high risk, but the Miami-Fort Palm Beach, Florida, market ranks first.
About $ 306.8 billion in home value is at risk, representing 23.2% of the total number of homes.
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About $307 billion in total home value is at risk for the Miami-Fort Lauderdale-West Palm Beach, Florida, Metro Area. (Jeffrey Greenberg / UCG / Universal Pictures Group via Getty Images)
This fund of costs can also deter buyers from the rest of the housing market. Many have been forced to the sidelines by persistent debt problems, as high interest rates and rising costs have made it difficult for people to leave.
Unexpected increases in home insurance costs can catch existing homeowners off guard and can discourage potential buyers trying to balance their monthly housing costs,” it said.
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Hannah Jones, a macroeconomic research analyst at Realtor.com, said in a recent report that these increases in premiums could discourage potential buyers from weighing their monthly expenses.
“For both of these costs, rising insurance costs can contribute to weak consumer demand and fragile housing in an already high-risk market,” Jones said.
