Rising Insurance, Mortgage Stress Impact Household Budgets Nationally

Home insurance rates across the United States are rising rapidly, particularly in disaster-prone areas, driven by increasing natural disasters, inflation in construction costs, and higher reinsurance expenses. Experts predict that these rates will continue to climb, as climate risks and rebuilding costs remain elevated. Geographic location plays a critical role in determining insurance premiums, with factors such as natural disaster risk, crime rates, and proximity to fire stations influencing costs. Government programs like the National Flood Insurance Program offer some relief but often come with higher costs and limited coverage, and recent policy shifts toward risk-based pricing are impacting affordability. Additionally, rising insurance and power costs are putting pressure on household budgets and small businesses, with mortgage arrears and financial hardships showing mixed trends influenced by recent interest rate changes and increased non-discretionary spending. The complexity of insuring residential condo associations also contributes to challenges in the insurance market, as many carriers avoid this segment due to its hybrid risk nature and the financial scale involved.