Rising insurance costs cut into buyer affordability

As of September 2024, property taxes and insurance consumed 32% of the average single-family mortgage payment, the highest share since tracking began in 2014. In Louisiana by mid-August 2025, insurance alone averaged 18.2% of a homeowner's monthly mortgage payment, with several other states reporting double-digit insurance shares. Researchers estimate higher tax and insurance burdens contributed to 149,000 additional mortgage delinquencies between mid-2022 and mid-2023. Major drivers include a 55% cumulative increase in replacement costs from 2019–2022—attributed to pandemic-era supply chain and labor issues—and growing population concentration in high-risk coastal areas.

For existing homeowners, and those looking to become homeowners, this means that as of September 2024, 32% of the average single-family mortgage payment went to property taxes and insurance, according to data from the Intercontinental Exchange. This is the highest rate recorded since Intercontinental Exchange began tracking this data in 2014. In Louisiana, as of mid-August 2025, on average 18.2% of a homeowner's monthly mortgage payment was going to insurance alone, according to data from Realtor.com.

Researchers at New York University, Rice University and the Federal Reserve Bank of Dallas believe these rate increases are responsible for an additional 149,000 mortgages becoming delinquent between mid-2022 and mid-2023 that would otherwise have remained stable. According to the Insurance Information Institute (III) there are a variety of factors that contribute to the rising insurance premium costs. A big driver of insurance premiums is replacement costs, Mark Friedlander, the director of corporate communications at III, says.

We did a study that looked at cumulative replacement costs over a four-year period. If we look at 2019 through 2022, we saw a 55% cumulative replacement cost increase that is nearly four times the Consumer Price Index increase during that same period. Friedlander attributes much of this increase to the supply chain disruption and labor shortages caused by the pandemic.

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