"In today's market, the buyer standing in your model home isn't just asking, Can I afford this? They're questioning: Will anyone insure it and how will that affect my payment and resale? In a cycle where climate risk, hidden ownership costs, and sour sentiment cause as much damage as mortgage rates and asking prices, that's no longer just a back-office issue. It's a fundamental brand question."
"That uncertainty isn't just a vague idea. It's now solid evidence: A new NBER analysis of 74 million escrow payments shows that homeowners' insurance premiums have risen considerably since 2021, with the transfer of disaster risk into premiums more than doubling from 2018 to 2024. A reinsurance shock alone added about $425 to the typical 2024 annual premium and lowered the value of nearby homes by approximately $43,900 in the most disaster-prone ZIP codes."
Buyers now worry about affordability, insurance availability, insurance cost, and resale impact. Climate risk, hidden ownership costs, and sour sentiment reduce home values as much as rates and prices. Builders that treat insurance as a core promise will appear safer, smarter, and more trustworthy, gaining a competitive edge. Homebuying has become a stressful exercise in risk management, especially for new construction, with buyers feeling fear and doubt. An NBER analysis of 74 million escrow payments shows substantial premium growth since 2021 and disaster-risk transfer into premiums more than doubled from 2018 to 2024. Reinsurance shocks added about $425 to the typical 2024 premium and lowered nearby home values by roughly $43,900 in the worst ZIP codes.
Read at www.housingwire.com
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