According to Insurify’s 2023 Insuring the American Homeowner report, the volatility in the housing market is expected to persist in 2023 due to rising home insurance rates, declining home values, and a concerning number of new mortgages already in negative equity.

Insurify’s VP of Insurance Sales, Shawn Powers, stated that the cost of individual policies is increasing, which could result in homeowners observing a difference of hundreds of dollars from one year to the next. This might prompt homeowners to search for better pricing by obtaining quotes from multiple insurance providers. However, it is important to note that homeowners may discover that their current insurance carrier is not the only one raising rates.

According to Insurify, American homeowners are growing more apprehensive about the effects of climate change on their home values. Even homeowners in cities such as Boise, Idaho, and Columbus, Ohio, which are not typically vulnerable to natural disasters, exhibited significant levels of concern about this issue.

According to the report, homeowners who were surveyed identified mortgage payments and the loss of property value as significant sources of stress. This finding is particularly noteworthy as the Federal Reserve has recently raised its benchmark interest rate by a quarter-point, taking it above 5% for the first time in over 15 years. These rate hikes are one of the factors contributing to the fact that 24% of Insurify’s survey participants had negative equity on their mortgages.

The report, which includes data from various sources such as the U.S. Census Bureau, Federal Emergency Management Agency, and Insurify’s own proprietary data, revealed the following key points:

• The average annual home insurance rate is projected to rise from $1,636 in 2022 to $1,784 in 2023.
• The escalating cost of materials and labor, more frequent severe weather events, and supply chain disruptions are the primary drivers behind the continued increase in home insurance rates.
• Home security is the most significant source of stress for homeowners, with almost 24% of respondents identifying it as their primary concern. As expected, theft was the most prevalent home insurance claim identified in the survey.