Learn the impact of rising insurance costs on home affordability.
Will home insurance be the next obstacle to selling your house? The rising insurance costs are becoming a major concern in real estate. Let’s take a closer look at the current situation with homeowners insurance, factors affecting the rise in insurance costs, and what you can do as buyers or sellers.
The current state of homeowner’s insurance. In areas like Florida, California, and Texas, there are significant challenges with people obtaining homeowners insurance and the high costs of the insurance they can get.
Recently, a lender shared that the cheapest insurance option for a buyer was around $2,500 a year on average, which is nearly double the expected rate of $1,500 a year. In their search for insurance, one quote even reached as high as $6,500 a year.
These increases in premiums can directly affect affordability and willingness to purchase a home. In other parts of the country, people honestly cannot pay their homeowners insurance or make the payments. That’s disturbing because, as you might know, when you have a loan on your house, you are required to have homeowner’s insurance.
“Rising insurance costs could be pricing buyers out of the market.”
Additionally, if the homeowner ends up with “force-placed insurance,” a policy by mortgage companies when the homeowner fails to secure their own insurance, it can be much more expensive than regular policies.
While places like Portland in the Pacific Northwest aren’t facing severe issues yet, residents are starting to notice rising insurance costs. There are a few key reasons why costs are getting higher and higher, like:
- Increased frequency of natural disasters
- Specific conditions in particular regions that raise risks, like regions near waterways or geological areas
- Changes in insurance company policies, reducing options for homeowners
- Presence of additional structures or outbuildings on properties leading to higher premiums
As costs rise, there’s growing fear that potential buyers might be priced out of the market entirely.
As we keep an eye on this situation, it’s important for buyers and sellers to stay updated on these trends. Although the Pacific Northwest hasn’t seen major changes yet, insurance costs are going up, as they always tend to do, but we’re seeing them increase now more than ever.
This means buyers may need to adjust their budgets and expectations. We remember the significant shifts from last year that made people concerned. So far, the market remains stable, but it’s important to stay vigilant.
If you’ve experienced sharp increases in your premiums or other related challenges, we’d love to hear from you. Please reach out to us at (503) 804-1466 or Anne@SellingPortlandHomes.com. Sharing your experiences will help us understand how these trends are affecting homeowners nationwide.
