Climate Risk Threatens $11.2 Trillion in US Housing Wealth

Approximately 25% of American homes are exposed to climate risks such as wind, floods, and wildfires, collectively threatening $11.2 trillion in residential real estate value, according to a Realtor.com® analysis. This exposure has already led to significant financial impacts, including property and capital losses between $76 billion and $131 billion from wildfires in California last year and increased flood risk in areas like Texas. Tornado Alley's eastward shift also places new regions at risk.

Homeowners in these high-risk areas are experiencing higher costs, with median monthly Homeowners Association (HOA) fees for homes facing severe or extreme climate risks at $192. This is 53.6% higher, or $67 more, than fees for homes in less risky locations. Furthermore, homeowners in climate-exposed states are facing elevated mortgage delinquency rates. In September 2025, Louisiana and Mississippi reported rates of 1.7% and 1.4% respectively, significantly above the national average of 0.8%, with similar issues observed in Texas and Florida.

The traditional safety net for homeowners is also showing signs of erosion. The National Flood Insurance Program (NFIP), which underwrites over 90% of flood policies for homeowners, is becoming more expensive. Despite rising premiums, the number of NFIP contracts in force has decreased by nearly 170,000 between May 2025 and May 2026. The most substantial year-over-year declines in NFIP contracts are occurring in disaster-prone states, including Texas, which saw a 7.8% drop, and Oklahoma.

The analysis highlights that rising insurance premiums are increasingly forcing some homeowners to forgo coverage altogether, leaving them vulnerable to severe financial losses in the event of a disaster. The report emphasizes that earlier disclosure of climate risks is crucial for buyers to make informed decisions, preventing future financial burdens.

Climate-related disasters have had broad effects nationwide. This includes the Eaton and Palisades wildfires in California last year, which caused total property and capital losses ranging between $76 billion and $131 billion. It also includes more risk in flood zones across the country, as seen recently in Texas. And Tornado Alley is shifting eastward, putting new areas at risk.