Do Rising Insurance Costs Threaten Homeownership?

Depending on where the house is located, carriers not only have increased insurance rates but some companies are refusing to insure them.

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Natural disasters have increased weather-related insurance claims and driven up homeowners’ insurance rates. The cost of rebuilding has also impacted rates. When buying a home, many are taking a hard look at the cost of insurance and the mortgage, and finding they can’t afford them. The question is: Can you afford homeowner’s insurance?

Prospective buyers aren’t the only ones feeling the strain; current homeowners are starting to forgo property insurance, and according to the Bipartisan Policy Center, in 2023, 12 percent were uninsured.

Insurance Rates Rising

Home prices are elevated, and interest rates are high. According to Freddie Mac, a 30-year fixed rate is 6.76 percent. That makes homeownership tough for prospective buyers. But there’s a hidden cost that’s catching many people off guard.