Texas housing affordability challenged by rising insurance costs

A report from the Kinder Institute for Urban Research and Texas 2036 indicates that rising homeowners insurance costs are significantly impacting housing affordability in Texas. Approximately 64% of Texas households, or roughly seven million, are currently unable to afford the median-priced home in their respective counties when insurance is factored into the total cost of ownership.

Insurance premiums have grown at a rate that far outpaces both home prices and household income. Between 2009 and 2024, premiums increased by 74%, while median household income rose by only 11%. In the last five years, premiums jumped by 30% compared to a 3% increase in income. Consequently, the median Texas county now allocates nearly 4.7% of household income to insurance, up from 2.9% in 2009.

Despite these costs, Texas remains a major destination for young homebuyers. According to SmartAsset, Texas had the highest number of mortgage applications from individuals under 35 in the country, totaling 259,737 applications in the last year. While North Dakota leads in the percentage of young adult applicants, Texas maintains a high volume of interest, with a typical home value of $302,187.