Rising Homeowners Insurance and Property Taxes: A Growing Concern

Across the United States, homeowners are facing rising housing expenses, even when interest rates or mortgage borrowing remain unchanged. A significant contributor to this increase is the rise in property taxes and homeowners insurance, typically included in monthly mortgage payments through escrow accounts.

The National Association of Realtors® reports that from 2019 to 2024, median monthly housing costs increased by 27%, escalating from $1,630 to $2,074. During the same period, monthly escrow payments, covering property taxes and homeowners insurance, grew from $334 to $419, marking a 25% increase. Notably, homeowners insurance costs surged by approximately 41%, rising from $91 to $128 per month, while property taxes climbed by nearly 20%, from $243 to $291 monthly.

Despite these rising escrow costs, they comprised a slightly smaller portion of the typical monthly housing payment, decreasing from 20.5% in 2019 to 20.2% in 2024. This shift is attributed to other components, such as principal and interest for new borrowers, increasing at a faster pace. Nadia Evangelou, a senior economist at NAR, highlighted significant homeowners insurance premium increases in high-risk coastal regions, impacting areas like Port St. Lucie, Florida, where escrow costs grew notably.