Rising insurance costs deepen homeownership strain

Homeowners are spending a growing share of their mortgage payments on property insurance, which is now rising faster than principal, interest and taxes, according to the September ICE Mortgage Monitor.

Data shows that annual property insurance payments for single-family mortgage holders now average nearly $2,370.

That amounts to 9.6% of monthly mortgage-related expenses, the highest share on record.

“Property insurance costs continue to be the fastest growing subcomponent of mortgage payments among existing homeowners,” said Andy Walden, head of mortgage and housing market research at ICE Mortgage Technology. “While mortgage principal, interest and property tax payments have all increased in recent years, insurance has far outpaced those gains, rising 4.9% in 2025, 11.3% annually and nearly 70% over the past five and a half years.

“That rapid escalation now means insurance alone consumes almost one in every $10 spent on average mortgage-related costs.”

The report highlighted several key findings:

• Slower but steady growth: Property insurance payments rose 4.9% in the first half of 2025, driving an 11.3% increase year-over-year. That is lower than the 7.3% increase reported during the same period in 2024 but still represents historically high growth.
• Outpacing other costs: Over the past five years, insurance has climbed nearly 70%, compared to increases of 23% for principal, 27% for interest, and 27% for property taxes.
• Higher cost per coverage: The cost per $1,000 of coverage rose by $0.29, or 5%, over the past 12 months, and by $0.85, or 16%, since 2022. The increases show that higher premiums reflect not only rising home values but also more expensive coverage.
• Regional differences: California saw the largest increases in the first half of 2025, with Los Angeles premiums up 9% in six months and 19.5% year-over-year. Florida, which has historically had among the highest property insurance costs, showed signs of moderation with smaller increases and even some declines.
• State-backed plans: Florida has seen a sharp drop in reliance on state-backed insurance programs, from 25% to 16% in the last 18 months. Usage of such programs is rising in California and North Carolina.

“As property insurance costs continue to climb and account for a larger share of monthly mortgage expenses, homebuyers and homeowners are facing increased affordability pressures,” said Tim Bowler, president of ICE. “These dynamics highlight the need for better data and connectivity. At ICE, we provide insights and integrated technology that help market participants anticipate risks, manage costs and deliver more sustainable solutions for homeowners.

“For instance, our solutions support helping borrowers and homeowners shop for the best home insurance rates. By bringing together origination, servicing and real-time data assets with our end-to-end technology platform, we enable our clients to respond to these pressures with greater confidence and efficiency.”