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By Giulia Carbonaro
Senior Reporter
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Homeowners insurance premiums rose by a staggering 64 percent nationwide between 2021 and 2025, nearly four times more than they did in the previous five years, according to a new study.
Newrez, a residential mortgage lender and servicer, analyzed roughly 1.2 million Newrez‑serviced loans originated in 2020 or later, and found the average national annual homeowners insurance premium climbed from $1,597 in 2021 to $2,625 at the end of last year.
This is no longer a problem just for a handful of states prone to suffer extreme weather events like California or Florida.
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The cost of homeowners insurance has climbed all across the country as a result of the growing threat posed by more frequent, more severe natural disasters, the higher cost of repairs, materials, and labor, and other local-specific factors.
Higher premiums have in turn contributed to make homeownership largely unaffordable for many Americans, particularly first-time buyers.
Where Has Homeowners Insurance Risen the Most?
Some of the steepest increases over the past five years have hit inland and Sun Belt states like Arizona, Texas and parts of the Midwest.
Arizona experienced the highest increase in homeowners insurance cost in the country, with premiums jumping by 94 percent between 2021 and 2025. Idaho followed with an 88 percent hike, and third came Iowa and South Dakota with 83 percent each.
They were followed by Utah (82 percent), Minnesota (82 percent), Washington (81 percent), Louisiana (80 percent), and Colorado (80 percent).
Even the states that experienced the smallest increases in the country during this period still faced significant hikes. In Alaska, which saw the smallest rise, premiums still climbed by 27 percent.
Despite these significant increases in the Western and Central states, homeowners in the Midwest and the South still paid the highest homeowners insurance premiums in the country last year, with Louisiana leading the way.
Homeowners in the Pelican State paid an average annual premium of $4,238—more than twice what homeowners in Delaware pay, at $1,647. Florida had the second-highest premiums in the country despite recent regulatory changes and legislative reforms which experts said has solved the crisis the state faced over the past five years, at $4,060.
Texas, which has also saw significant increases in cost due to intense weather events, high construction inflation, and rising home values, followed with an average premium of $3,952.
Will Homeowners Insurance Premiums Continue Rising?
Experts believe that homeowners insurance premiums will continue rising this year, with average costs expected to increase by approximately 4 percent to about $3,057 annually nationwide, according to Insurify, an online insurance comparison site.
This could have disastrous consequences for many homeowners across the country. Higher premiums are increasingly affecting monthly mortgage payments through escrow, pricing some buyers out of homeownership and putting pressure on existing homeowners.
Insurers facing higher risks are cutting coverage, refusing renewals, or restructuring their policies so as to shift this risk to homeowners. Those left without coverage, or forced to rely on states’ insurers of last resort end up with the most to lose when a natural disaster strikes their homes.
After last year’s devastating wildfires in California, it was revealed many of those affected had had their policies canceled by their insurer only months ahead of the extreme weather event. Earlier this week, the Justice Department filed a brief supporting a California case accusing 16 insurers in the state of allegedly conspiring to cancel homeowners’ fire coverage and push customers onto the California FAIR Plan, the state’s fire insurer of last resort.
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