Climate Disasters Put US Homeowners' Wealth and Insurance at Risk

Climate-related disasters in the United States are casting doubt on homeownership, long seen as a cornerstone of the American Dream and a way to build wealth for children's education and retirement. Floods and fires damage properties and push up insurance rates, making it riskier to put life savings into a house. The reporting comes from the environmental outlet Grist, in a story published by Wired.

Poll and projections

A poll conducted for Grist by the think tank Data for Progress found that 58% of likely US voters believe climate change will hinder their ability to achieve the American Dream over the next 20 years. That includes 42% of Republicans. The firm First Street projected last year that climate risks could cut nearly $1.5 trillion from the value of American homes by 2055.

The Asheville example

Asheville, North Carolina, was regarded as a "climate haven", but in September 2024 almost 14 inches of rain fell on it over three days, and the remnants of Hurricane Helene caused flooding. In western North Carolina, more than 74,000 homes were damaged and only about 4% had flood insurance, leaving $9.5 billion in uninsured residential losses. Asheville's average home price fell 5% over the past year, while the national average rose 1.2%.

Resident Sierra Isley, 26, and her girlfriend planned to buy a house two years ago but backed out because of a large lien on the property. They rented an apartment instead; its basement flooded, though many neighbors lost their homes entirely.

Insurance

Since 2020, property insurance costs have risen almost 80%, and the average single-family mortgage holder now pays $209 a month. Douglas Heller, director of insurance at the Consumer Federation of America, argues the insurance industry uses climate change as an excuse for excessive rate increases. Renters are affected too, since landlords' insurance costs feed into rents.

Rebecca Elliott, a sociologist at the London School of Economics and Political Science, says it is time to rethink the American Dream's bargain, in which so much of a person's economic future depends on the fate of a single structure.