$11.2 Trillion in U.S. Homes Face Severe Climate Risk

(8/7/26)  Turn on the TV, and you’re likely to see reports about wildfires, droughts and severe thunderstorms. Although these potential disasters can threaten both life and property, a recent report by Realtor.com found that home shoppers are continuing to consider high-risk homes despite the fact that some 23.1% of U.S. homes, representing $11.2 trillion in value, face severe or extreme risk from wind, flood or wildfire.

"Price is still the biggest motivator for a lot of home shoppers, even in places where climate risk is well known," said Jiayi Xu, an economist at Realtor.com. "But that doesn't mean the risk disappears. It shows up later, in insurance premiums, HOA fees and financing, often after the sale is already done."

Indeed, the Realtor.com report found that homeowners in high-risk areas pay a median $192 a month in homeowners association fees, 53.6% more than homeowners in lower-risk areas. That’s likely due to higher insurance rates in high-risk zones. Flood insurance premiums, for example, are projected to nearly double, from $689 in December 2022 to $1,288.  

So, does that mean that buyers should avoid homes that face climate risk? Not necessarily. It’s all about the assumption of risk and how much risk a buyer is willing to undertake to have killer views of the ocean (hurricane and flood risk), desert (drought risk) or forest (wildfires).

While many homes facing severe or extreme risk are priced below homes without such issues, Realtor.com found that in some markets, buyers of severe or extreme risk homes are willing to pay a premium. In Anne Arundel County, Md., for example, severe or extreme risk homes are priced 44% above the price per square foot of homes without those risks, driven by Chesapeake Bay waterfront access.

But buyers should at least know what they’re getting into so they can knowingly assume the risks. Sites like FirstStreet.com, for example, now provide information on flood, fire, wine, air quality and heat risks.  

"Having the full financial picture, including future insurance costs and coverage availability, matters just as much as the purchase price," said Xu. "There's nothing wrong with choosing a high-risk area for affordability or lifestyle, as long as it's an informed choice."