Climate change could erase $1.47 trillion in U.S. home values, according to a new report from the climate risk research company First Street.A combination of severe weather exposure and rising insurance costs will dramatically increase the overall cost of owning a home over the next 30 years, the report said.What You Need To KnowClimate change could erase $1.47 trillion in U.S. home values, according to a new report from the climate risk research company First Street
A combination of severe weather exposure and rising insurance costs will dramatically increase the overall cost of owning a home over the next 30 years
The suburbs of major metropolitan areas have lured home buyers with less expensive housing, more space and lower insurance costs, but those places are increasingly under threat
Miami will see the largest increase in insurance costs over the next 30 years, followed by Jacksonville and Tampa, Fla.
The report said the suburbs of major metropolitan areas have lured home buyers with less expensive housing, more space and lower insurance costs. But those places are increasingly under threat. The Sun Belt states of Texas, Florida and California have made up 40% of the country’s natural disaster costs since 1980.The recent wildfires in Los Angeles that killed 28 people and destroyed at least 16,000 structures are an example of intensifying natural disasters triggering enormous amounts of property damage that lead to higher insurance premiums.“Insurance costs are rising dramatically faster than mortgage payments,” First Street researchers wrote in their report. From 2013 to 2022, they found insurance had grown from making up 7% of a homeowner’s mortgage payment to 20%.Risk-based insurance pricing could drive up insurance costs 30% by 2055, with Miami seeing the largest premium increase (322%), followed by Jacksonville, Florida (226%), Tampa, Florida (213%), New Orleans (196%) and Sacramento, California (137%).The report found that climate change will drive large population moves in the coming decades, as more people relocate to areas that are less vulnerable to natural disaster risks. By 2055, First Street said 84% of all U.S. Census tracts could experience negative property value impacts because of the effects climate change will have on some areas’ property values and insurance costs.Residential real estate in the U.S. is currently valued at $50 trillion. Nearly two-thirds of U.S. adults are homeowners.