The average price of home insurance rose 23% in January from a year earlier, and in some states, premiums hit inflation-hit homeowners by more than 60%, according to a recent report.
Natural disasters and rising construction costs have pushed the national average for insurance on a $250,000 home to $1,759 a year, or about $147 a month, according to a research report. Analysis by Bankrate Previously reported by Daily Mail.
However, Bankrate noted that insurance is not one-size-fits-all, and insurance premiums in Louisiana rose 63% from a year ago to $3,246 a year. CNBCciting data from Quadrant Information Services for zip codes in all 50 states.
In Nebraska, a state known for its changeable weather patterns, the average home insurance policy amount for a $250,000 home rose to $4,745 per year per bank rate, or about $395 per month, about 170% above the national average. .
According to a report from CNBC, this number was a staggering 61% increase over the previous year.
Other states with impressive year-over-year spikes were Colorado (49%), Arizona (40%), and Utah (37%).
Bankrate said the rise in premiums was a response to “the impact of inflation on past losses experienced by insurers, rising costs of building materials and future risks posed by extreme weather events.”
According to the National Oceanic and Atmospheric Administration’s National Center for Environmental Information, the United States has experienced 28 climate disasters that have caused at least $1 billion in damages.
The number of 10-digit disasters “put 2023 at number one for the most billion-dollar disasters in a calendar year.” NOAA saidcited 17 “severe weather” events, including the historic wildfires that destroyed Lahaina, Maui, Hawaii, last year, as well as four floods, two devastating tornadoes, and two tropical storms. .
Policies vary widely depending on factors such as the age, size, and location of the home, the owner’s credit history, state regulations, and natural disasters specific to different regions of the country.
These factors have made Nebraska, Oklahoma and Kansas the most expensive states for home insurance in the country, according to Bankrate.
Oklahoma is the second most expensive state for homeowners insurance, with plans averaging $4,565 per year or $380 per month.
In Kansas, where tornadoes hit the state in 2023, the rate was $4,072 a year, or about $340 a month.
According to Bankrate, the three states with the lowest home insurance premiums are Hawaii ($408 per year), Vermont ($694) and Delaware ($764).
The average premium for a $250,000 home in New York was $1,728 a year, nearly 2% lower than the national average.
The housing market has been hurting in recent months as high mortgage rates continue to drive many potential home buyers out of the market.
On Wednesday, the Mortgage Bankers Association announced that mortgage demand for the week ending Feb. 16 plunged by 10.6% from the previous week as interest rates surged more than 7%, the highest level since early December.
The average contract interest rate for a 30-year fixed-rate mortgage with a loan limit of $766,550 was 7.06%, up from 6.87% the previous week, according to MBA seasonally adjusted. indexMeanwhile, borrowing rates for loans over $766,550 rose from 7% to 7.16%.
As a result, the number of applications for mortgages to purchase new homes fell by more than 10%, down approximately 13% compared to the same week last year, and to the lowest level since early November 2023. CNBC.
At this time last year, the 30-year fixed rate was 6.62%.
