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FACT SHEET: Climate Change And Trump Are Exacerbating The Housing Affordability Crisis

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Last Updated: 7/17/26

Climate change and Trump’s reckless policies are fueling skyrocketing home insurance costs, worsening the housing affordability crisis, and putting the dream of homeownership out of reach for many. Americans who already own a home are feeling the pain as more homeowners fall behind on their mortgage payments and make financial sacrifices, such as skipping meals or medical care to afford coverage. Trump can gaslight Americans on the economy as much as he wants, but families are hurting while his billionaire donors profit. 

INSURANCE COMPANIES ARE RAISING INSURANCE RATES DUE TO CLIMATE CHANGE IMPACTS, DRIVING UP HOUSING COSTS

• Climate change is driving up insurance premiums as climate-disaster-related claims increase due to more frequent and severe events.
• The insurance industry has been slow to respond to the climate crisis, but quick to raise rates far beyond what many people can afford.
• A 2025 report found 26.1% of U.S. homes, representing $12.7 trillion in value, were exposed to at least one type of severe or extreme climate risk.
• A GAO report found that homes in areas with a high risk of wind damage had home insurance premiums about 58% higher than similar homes in areas with a medium level of risk. 
• Moving from a medium to a high level of wildfire risk was associated with an 8% increase in premiums, and increased disaster risk also reduced insurance availability. 
• Insured losses from natural catastrophes in the U.S. averaged $100 billion a year between 2023 and 2025, up from an average of around $15 billion per year a decade earlier. 

HOME INSURANCE RATES HAVE SOARED IN RECENT YEARS, CREATING AN AFFORDABILITY CRISIS THAT IS HURTING AMERICANS

• The average home insurance premium rose 12% in 2025.
  • From 2022 to 2025, the average cost of coverage with 14 large home insurance companies rose by about $980. 
• Since 2021, at least 6 million home insurance policyholders nationwide have seen rate hikes. 
• Home insurance rates climbed 46% cumulatively across the U.S. from 2021 to 2025, nearly three times the rate of inflation. 
• Between 2022 and 2025, state regulators approved home insurance rate increases averaging 50%. 
• As of July 2026, LendingTree reported that home insurance accounted for 8.5% of typical monthly housing costs for homeowners with a mortgage, which worked out to about $200 a month.
  • In several states, insurance costs rivaled or even exceeded property taxes. Tennessee had an insurance-to-property tax ratio of 1.99, meaning that estimated monthly home insurance costs of $284 were nearly double the estimated monthly property taxes of $143.
• Almost 60% of homeowners reported making financial sacrifices to help pay for insurance coverage: 10% skipped medical care, 10% skipped meals, and 15% delayed payments on other bills, such as utilities. 
• As insurance premiums have risen, so has the rate of homeowners falling behind on mortgage payments: the 90-plus-day delinquency rate for families in the lowest income bracket jumped from 0.5% in 2021 to nearly 3% by the end of 2025.
  • A $500 increase in annual insurance premiums was associated with a 20% higher mortgage delinquency rate. 
  • Home insurance premium increases pushed roughly 31,000 mortgages into delinquency in 2022. 
  • Continued increases could lead to an additional 203,000 mortgages per year falling into delinquency between 2025 and 2055.
• Nearly half of American homeowners said the cost of home insurance weighs “very heavily” or “seriously” on their home purchasing decisions.

INSURANCE COMPANIES HAVE TRIED TO AVOID PAYING CLAIMS

• Among the five largest insurers, 44% of home insurance claims in 2025 resulted in zero payout, up from 36% in 2016.
• About 51% of all home insurance claims to USAA and three affiliate insurers were unpaid in 2025.
• Policyholders have filed hundreds of lawsuits nationwide alleging State Farm was “secretly working to cut insurance payouts” on home insurance.
• In May 2025, storm victims and insurance adjusters testified in the U.S. Senate that the insurance industry used aggressive tactics to limit payouts to policyholders after Hurricanes Helene and Milton.

INSURANCE COMPANIES’ POLICY CANCELLATIONS HAVE LEFT THOUSANDS OF HOMEOWNERS WITHOUT COVERAGE ACROSS THE COUNTRY

• Since 2021, at least 1.4 million insurance policies have been canceled.
  • Between 2018 and 2024, more than 1.9 million home insurance contracts were nonrenewed, and average nonrenewal rates were about 80% higher in the zip codes with the highest climate risk than in the zip codes with the lowest risk. 
  • Home insurance non-renewal rates are rising in many states, with Florida leading the way. Non-renewals in the state increased by 280% from 2018 to 2023. 
• U.S. homeowners in areas prone to natural disasters lost homeowners’ insurance at nearly twice the rate of those who lived in less vulnerable counties. 

THE INSURANCE CRISIS HAS A DISPROPORTIONATE IMPACT ON LOW-INCOME COMMUNITIES AND COMMUNITIES OF COLOR

• A March 2024 report found that 22% of Native American homeowners, 14% of Hispanic homeowners, and 11% of Black homeowners have no insurance, leaving them vulnerable to having their entire wealth drained due to a climate disaster.
• In 2021, an estimated $1.6 trillion in property value of homes lacked coverage, including $339 billion of uninsured Hispanic-owned homes and $206 billion of uninsured Black-owned homes.
• Latinos are 47% more likely than the average American to live in an area that faces coastal flooding, and Black Americans are 9% more likely to live in coastal flood-risk areas.
• According to the Consumer Federation of America, Black and Hispanic consumers with home insurance pay hundreds of dollars more on average each year in premiums, totaling tens of thousands of dollars over a 30-year mortgage.

TRUMP’S PROPOSALS WILL FURTHER EXACERBATE THE HOME INSURANCE CRISIS AND DRIVE PREMIUM INCREASES

• Trump’s tariffs were expected to increase home insurance costs 38% faster by the end of 2025, and tariffs on construction materials were expected to increase annual premiums by more than $100.
• In May 2026, Trump’s FEMA Review Council released its final report, which recommended shifting policies under the National Flood Insurance Program (NFIP) to private insurers.
  • Privatizing NFIP would raise premiums by an average of 64%, an additional $600 annually, for the average homeowner with flood insurance. Some states would see increases of more than 200%.
  • NFIP provides flood insurance in flood-prone areas to property owners who otherwise would be unable to obtain coverage, reducing the cost of flood recovery.
  • Sabotaging Our Safety found that the FEMA Review Council’s recommendations could result in up to a 60% decline in new flood insurance policies in low-income areas. Flood insurance premiums could jump almost 280%, equal to more than $2,000 annually, in flood-prone areas.
  • NFIP provides coverage for more than 4.7 million homeowners. In 2024, more than 95% of flood insurance policies nationwide were covered by NFIP.
• Trump’s FEMA Review Council recommended raising the threshold for disasters to qualify for federal assistance and shifting more financial and administrative burden for recovery and preparedness onto states – which may not have the needed resources to support individuals impacted by extreme weather disasters.
  • FEMA also helps states prepare for extreme weather events; undermining the agency would likely increase costs from future disasters.
  • The FEMA Review Council’s recommendations to privatize NFIP while simultaneously cutting its overall workforce would compound problems like higher premiums, more claim denials, and delays for millions of policyholders.
• Trump tried to eliminate a FEMA program that funds resiliency improvements to help communities survive floods. Without such measures, local and state governments and homeowners would see higher insurance rates to offset increased risk.
  • In 2026, a federal judge ordered FEMA to reopen the program, but some states still had not received their owed funds, and the reopened program imposed new restrictions on applications.
• Trump’s budget cuts and layoffs at the National Oceanic and Atmospheric Administration (NOAA) were expected to affect the quality of data that insurers rely on to assess risk and set premiums.
• Insurance industry analysts and experts believed that the Trump administration’s policies on climate, including cutting funding to key programs, reducing access to and limiting the collection of climate data, and slashing the ranks of federal regulators, were contributing to property insurance rate increases. 
• Experts warned that the Trump administration’s plan to dismantle the National Center for Atmospheric Research, whose climate data the insurance industry uses to predict losses and set rates, would raise property insurance prices.
  • In June 2026, a federal judge blocked the Trump administration’s attempt to strip the National Center for Atmospheric Research of its supercomputing center.