Climate Risks and Their Impact on US Homes

(NewsNation) — More than a quarter of U.S. homes — worth a combined $12.7 trillion — are exposed to “severe or extreme climate risk,” according to a new Realtor.com analysis.

The report examined threats from wildfires, floods and wind damage — hazards that have been top of mind after a string of recent disasters.

“These challenges not only affect residential safety but also influence property values, insurance costs, and overall market stability,” Realtor.com Economist Jiayi Xu said in the report.

Types of Climate Risks

About 18% of homes face potential hurricane wind damage, the most common risk, while 6% are threatened by flooding and another 6% by wildfires.

Realtor.com found that the most at-risk metros are predominantly clustered in the South, where homeowners face the highest insurance costs relative to home values.

Miami has the heaviest homeowners insurance burden among the 100 largest U.S. metros, with annual premiums equal to 3.7% of property value, according to Realtor.com’s analysis of Insurify data. Nationwide, the average is only 0.8%.

Regional Climate Risks

Florida dominated the list, with five metros in the top ten for the highest insurance burden, more than any other state. Nearby Gulf Coast hubs, New Orleans and Baton Rouge, also ranked near the top.

“Population growth in high-risk coastal communities is putting more people and properties in harm’s way of catastrophes,” Mark Friedlander, senior director of media relations at the Insurance Information Institute, told Realtor.com. “This leads to higher loss costs for insurers, generating rising premiums.”

Forecasting Climate Risks

Forecasters at NOAA’s National Weather Service expect 13 to 18 named storms this year, with 5 to 9 potentially strengthening into hurricanes (74+ mph winds), an “above normal” activity level for the Atlantic basin.

Of those, forecasters say 2 to 5 could escalate to major hurricanes with winds of 111 mph or more.

Though wind poses the broadest threat, flooding may be the most overlooked risk.

The Impact of Flooding

As of 2025, there are about 4 million homes in FEMA’s Special Flood Hazard Areas that have a 1% or greater chance of flooding each year, but climate risk analytics firm First Street found that another 2 million homes outside those zones may still face major flood risks, the report noted.

The threat isn’t just about property values. In July, catastrophic floods in Central Texas killed at least 136 people, including dozens of children.

Wildfires: A Growing Threat

Wildfires have also emerged as a growing threat, particularly out West. Of the nearly 6% of homes facing severe or extreme fire risk, about 40% are in California, Realtor.com found.

Earlier this year, wildfires in the Los Angeles area killed at least 30 people and destroyed thousands of homes. The disaster struck little more than a year after flames devastated Maui, leaving more than 100 dead and $5.5 billion in damage.

Conclusion

The impact of climate risks on US homes is a pressing concern, with over a quarter of homes facing severe or extreme climate risk. The most at-risk metros are predominantly clustered in the South, where homeowners face the highest insurance costs relative to home values. It is essential for homeowners, policymakers, and insurance companies to take proactive measures to mitigate the effects of climate risks and ensure the stability of the housing market.

Frequently Asked Questions

Q: What percentage of US homes are exposed to severe or extreme climate risk?

A: More than a quarter of US homes — worth a combined $12.7 trillion — are exposed to “severe or extreme climate risk.”

Q: What are the most common climate risks faced by US homes?

A: The most common climate risks faced by US homes are hurricane wind damage, flooding, and wildfires.

Q: Which state has the highest number of metros with the highest insurance burden?

A: Florida has the highest number of metros with the highest insurance burden, with five metros in the top ten.

Q: What is the average annual premium for homeowners insurance in the US?

A: The average annual premium for homeowners insurance in the US is 0.8% of property value.

Q: How many homes are in FEMA’s Special Flood Hazard Areas?

A: There are about 4 million homes in FEMA’s Special Flood Hazard Areas that have a 1% or greater chance of flooding each year.