New research from ReadySetLoan reveals that nearly half of U.S. homeowners are concerned that rising property taxes and soaring homeowners insurance premiums could jeopardize their ability to keep their homes. As climate disasters continue to make headlines, the financial strain of increasing insurance costs has become a major burden for many.
Key Findings from Recent Research:
đˇ 50% of homeowners are now questioning their ability to afford their homes due to rising property taxes and insurance premiums.
đˇ Nearly 60% are considering selling their homes within the next five years if these costs continue to rise.
The Impact of Climate Change on Insurance Premiums
The increasing frequency and severity of natural disasters have led to substantial hikes in homeowners insurance premiums. For example, in California, the risk of flooding is projected to surpass that of wildfires by 2025, compelling homeowners to purchase costly flood insurance. Even an inch of water damage can result in repair costs of approximately $25,000.
Across the U.S., insurance premiums have risen sharply. Some insurers have increased rates by over 30%Â in the past year due to factors like severe weather events and rising reinsurance costs.
Rising Property Taxes and Home Affordability
Property taxes for single-family homes increased by 5.1% from 2023, with the median payment reaching $3,018. Forecasts suggest that home prices will continue to rise, potentially leading to even higher property taxes in the coming years.
States like Colorado, Georgia, and Florida have reported record property tax hikes, driven by rapid home price growth. For example, Georgiaâs property tax payments rose by 10.3% from 2023 to 2024 and have increased by 51.5% since 2019.
Consequences for Homeowners
The combined effect of rising insurance premiums and property taxes is making homeownership increasingly unaffordable for many. In some cases, the costs of insurance and taxes now exceed mortgage payments.
đˇ In Miami, over 25% of borrowers now spend more than half their mortgage payment on property taxes and homeowners insurance alone.
Many homeowners feel "trapped"Â in properties they can barely afford, considering selling, downsizing, or relocating to areas with lower taxes or even moving abroad to escape the high costs.
Looking Ahead: How Homeowners Can Navigate Rising Costs
As external cost pressures continue to rise, homeowners should explore strategies to mitigate financial strain, such as shopping for better insurance rates, considering higher deductibles to lower premiums, or taking advantage of available property tax exemptions.
đˇ ReadySetLoan advises homeowners to stay informed about potential policy changes and market shifts that could impact affordability.
For expert insights and guidance on navigating todayâs housing market, turn to ReadySetLoanâyour trusted resource for home financing solutions.
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