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Climate Change Is Making Homeownership More Expensive. Here’s How to Weather the Storm

Extreme weather is the next hurdle for homebuyers.

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Last year was the warmest calendar year on record since the preindustrial era. As the world continues to heat up, weather patterns affect our life decisions, from where we vacation to how we buy homes

This story is part of CNET Zero, a series that chronicles the impact of climate change and explores what’s being done about the problem.

“The climate question is a really important part of being a smart consumer,” said Andrew Rumbach, a senior fellow at the Urban Institute who focuses on climate change and natural hazard risk to communities. 

If you’re a future homeowner, climate change could affect how much you pay, what you prioritize and where you settle down. Let’s take a look at how increased global temperatures are affecting homebuying

Extreme weather events and property risk

Higher incidences of extreme, costly weather events have taken a toll across the US in recent years. Since 1980, billion-dollar weather and climate events have more than quadrupled, according to National Oceanic and Atmospheric Administration data. Last year, the majority of these events were natural disasters, including wildfires, flooding and tornados, which threaten costly risk and damage to property. 

Over the past decade, 57% of US adults say they have incurred some kind of cost due to extreme weather, according to Bankrate’s Severe Weather Financial Impact Survey. With more severe weather, utilities and energy costs get more expensive, and it becomes more of a financial burden to protect, maintain and upgrade your home

How does climate change increase homeownership costs? 

Climate change increases the cost of homeownership in a variety of ways, from higher insurance premiums and household repairs to steeper energy bills and urgent upgrades. 

Protecting your home

The average cost of homeowners insurance increased by 6.97% between 2020 and 2021, according to a National Association of Insurance Commissioners report. Though a steady increase in homeowners insurance since then can be attributed to inflation and construction costs, climate change has also contributed to a spike in premiums, according to Sean Kevelighan, CEO of the Insurance Information Institute

Maintaining your home

Flooded basements, fallen trees, leaky roofs and costly water issues from unprecedented rainfall can have a heftier toll on your wallet. For example, a roof replacement can cost anywhere from $5,755 to $12,498. 

Utility bills

If the increasing cost of utility bills isn’t enough, you can expect higher energy bills because of extreme weather, such as brutal heat in the summer. Power outages can also throw a wrench into your finances since they disrupt work and travel. 

Property modifications

Changing to energy-efficient appliances, bolstering your property’s insulation or installing higher-quality windows could be necessary to heat and cool an older home. These kinds of upgrades and renovations generally require a hefty upfront investment. 

Can you inspect your home for past and future risks? 

As a new homebuyer, you should always consider the possibility of climate hazards outside your control. Tools like ClimateCheck with predictive hazard models can help you gauge how extreme weather might affect your property. You can also type in an address at to see the risk for heat, flooding and wildfires, and to check wind and air quality.  

If you want to know a particular county’s “resilience rating,” enter the state in the Insurance Information Institute’s peril maps

Though the danger of climate change plays some role in the housing market, a lot of prospective homebuyers are more concerned with high home prices. In fact, many households are moving toward climate-risky locations rather than away from them, according to Rumbach. 

“If you’re looking at where the country is growing the fastest, it’s in places where there’s a lot of storms, hurricanes and wildfires,” Rumbach said. For example, many are moving away from relatively climate-safer parts of the country and into states like Texas and Florida.

How to be smart about climate change when buying a home  

While shopping for a home, climate change might not be the biggest thing on your mind, but it should be a factor. Before you take out a mortgage and make one of the most significant financial decisions of your life, do plenty of research, ask questions and determine your risk tolerance. Also keep in mind that alongside global temperatures, the real estate market is constantly changing. 

Here are three tips that will help you make the right calculus. 

Look into insurance policies ASAP 

Don’t wait until the home inspection to consider homeowners insurance. The sooner you can compare policies and get an insurance professional involved, the better.

“You want to think twice about your biggest and most important investment,” said Kevelighan. “It’s not something you want to get on the cheap in this day and age.” 

Look into the kind of hazards your home might be prone to that you’re not familiar with. Think about what type of insurance and how much coverage you need in the event of disaster. Research policies that are sold separately and can provide additional security for your home, such as flood insurance and earthquake insurance, and calculate the cost of getting repairs versus getting everything replaced. 

Factor in the total costs 

Many first-time buyers don’t factor in all the ongoing costs of buying a home, which makes it even harder to afford the extra protections and investments related to extreme weather. Here are some costs you should make sure to add to your homebuying budget outside of a down payment and your monthly mortgage bill: 

  • Homeowners insurance 
  • Property taxes 
  • Maintenance and repairs 
  • Utilities 
  • Yard or lawn care 
  • Future home improvement projects and renovations 

Take your time 

Low housing inventory might push you to purchase a home before you’re ready. But be prepared to hit “pause” to review the potential risks, contingencies and costs. 

When it comes to safeguarding your home, you’ll want to be proactive rather than reactive. 

“Ten, 20, 30 years down the road, within the period of a mortgage, the climate will be significantly warmer and things will have changed,” said Rumbach. “And it’s important that we’re protecting our investments.” 

Jackie Lam is a contributor for CNET Money. A personal finance writer for over 8 years, she covers money management, insurance, investing, banking and personal stories. An AFC® accredited financial coach, she is passionate about helping freelance creatives design money systems on irregular income, gain greater awareness of their money narratives and overcome mental and emotional blocks. She is the 2022 recipient of Money Management International's Financial Literacy and Education in Communities (FLEC) Award and a two-time Plutus Awards nominee for Best Freelancer in Personal Finance Media. She lives in Los Angeles where she spends her free time swimming, drumming and daydreaming about stickers.
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