US homeowners insurance market sees turnaround amid shifting reinsurance costs

The US homeowners insurance market is experiencing a significant turnaround, driven largely by falling reinsurance prices and improved catastrophe risk management. According to an AM Best report, the segment moved from a $1.3 billion net underwriting loss in 2024 to a $16.5 billion net underwriting gain in 2025. This stabilization has allowed insurers to slow rate hikes; the average approved nationwide rate increase dropped to 4.3% in the first half of 2026, down from 13.5% in 2024.

Despite these national trends, specific regions face localized challenges. In Texas, homeowners continue to deal with high premiums driven by high climate-risk scores and frequent weather events. Factors contributing to Texas costs include hurricane and storm surge risks on the Gulf Coast, inland flooding, wildfires in the west, and a high frequency of hail events. Additionally, construction-cost inflation and reinsurance repricing continue to exert pressure on Texas policyholders.