America’s housing and insurance markets faces a “perfect storm” of affordability challenges, climate risks, and supply shortages that threatens to displace millions of families, undermine economic stability, and push homeownership out of reach.

Why This Matters

This brief provides a case study of one housing market that many markets across the country can examine. The pressures on households, real estate and insurance markets, and state and local governments are playing out in cities, rural areas, and suburbs across America. Harris County, Texas, is a warning sign of what is to come and what risks we need to grapple with.

This crisis affects first-time homebuyers, working families, and seniors on fixed incomes, while creating ripple effects throughout the economy. Policymakers at all levels need actionable data to address supply constraints, implement affordability programs, and prepare communities for climate-related housing displacement. Critical policy areas at the intersection of insurance and housing finance markets require immediate attention, as solutions will demand regulatory and data coordination, innovative policies and risk management practices, and funding solutions that support households’ ability to access affordable insurance.

What We Found

The housing affordability crisis has reached historic proportions, with climate risks accelerating costs beyond what most Americans can afford. From 2014 to 2024, in Harris County,

• insurance costs increased 146 percent (from $1,200 to $2,950 annually),
• property tax rates rose 16 percent (from 2.15 percent to 2.49 percent),
• flood insurance requirements expanded to 25 percent more properties,
• the taxes and insurance portion of mortgage payments grew from 41.3 percent to 51.8 percent, and
• monthly taxes and insurance costs increased $667 (from $458 to $1,125).

We also found the following:

• Affordability gaps have exploded nationwide. In Harris County alone, the gap between what the median household can afford and the median home price has quadrupled in five years.
• Cost-burdened households are becoming the norm, not the exception. For homeowners, unexpected increases in taxes and insurance costs are adding hundreds of dollars to monthly mortgage payments.
• Climate risks are compounding affordability challenges through insurance market failures. Climate-induced increases in insurance premiums may add more than $15,000 to home costs in vulnerable areas.
• The rental market offers little relief for struggling families. Landlords often pass higher insurance costs onto tenants through higher rents, further cost-burdening renters and aspiring homeowners.
• Failures in market coordination amplify household vulnerability. Disconnected regulatory oversight between housing finance and insurance markets leaves households struggling with housing affordability and accessibility.

How We Did It

This analysis synthesizes housing, mortgage, and insurance data in Harris County from multiple sources, including the US Census Bureau’s American Community Survey, county real property and insurance records, real estate market reports, insurance premium data, and climate risk assessments. The methodology included calculating affordability gaps, analyzing cost burden rates across income levels, mapping the intersection of climate vulnerabilities with housing affordability challenges, and reviewing regulatory frameworks governing the intersection of housing finance and insurance markets.