Nearly Two-Thirds of Texans Can’t Afford a Typical Home After Insurance Costs
Tens of thousands could be priced out of buying a home in the state by a single year of rising homeowners insurance premiums.
Nearly two-thirds of households in Texas cannot afford to purchase the median-priced home in their county when considering homeowners insurance costs, according to a new study. The rising cost of insurance premiums is a significant threat to housing affordability in the state, disproportionately affecting lower- and moderate-income households, as well as communities of color.
Texas has historically offered affordable housing, even in major cities like Austin, Dallas, and Houston, but the increasing insurance rates are now threatening the state's reputation as an affordable place to live. The study found that Texas' average homeowners insurance premium increased from $2,296 in 2019 to $2,983 in 2024, a 30 percent rise over five years.
Home values in Texas also surged during this period, increasing by 31 percent to $169,250 in 2024. While median household income grew by only 3 percent to $65,035, it was still insufficient to cover the median home value. The study defines "unaffordable" as spending more than 30 percent of gross income on home ownership costs, including insurance premiums.
Insurance premiums alone now account for 4.65 percent of median household income in the median Texas county, up from 3.68 percent in 2019. Researchers modeled four additional premium growth scenarios, ranging from 4 to 10 percent, to illustrate the potential impacts on homeownership affordability. Even in these scenarios, the future costs of insurance would make homeownership increasingly unattainable for many Texas residents.
The study also found that lower- and moderate-income households, as well as Black and Hispanic households, are disproportionately affected by rising insurance costs. In the state's largest metro areas, the most significant affordability gaps were observed in Fredericksburg, Kerrville, and College Station. These areas have also been impacted by severe weather events, such as flash floods in Kerrville, causing extensive infrastructure damage.
Written by urgent.news from Newsweek's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
