Traditionally, factors such as interest rates, home inventory, home values and the state of the economy have been the main factors considered to impact the health of the housing market. However, there are two forgotten factors whose influence on the real estate market are exponentially growing: the cost and availability of homeowners insurance.

According to the Insurance Information Institute, premium rates rose 12.2% on average nationwide from 2017 to 2021. Coupled with rebuilding and replacement costs surging more than 50% during the pandemic, these rates are expected to increase even further. Markets like Florida and California that have been hard hit by natural disasters in recent years are expected to see even greater increases than the rest of the country. But no area is immune from climate change. We’re now beginning to see natural disasters drive rate increases beyond regions typically prone to natural disaster, according to a report by Axios, leading to dire financial situations for homeowners when coupled with other economic factors, such as inflation.