Challenges for First-Time Homebuyers Amid Rising Homeowners Insurance Costs
Insurance comparison platform The Zebra has identified a potential strain on first-time homebuyers due to increasing homeowners’ insurance premiums, which may exacerbate affordability issues as overall housing costs rise. The company's recent analysis shows that only 21% of home purchases are now by first-time buyers, dropping from 24% in 2024 and 40% before 2008. Concurrently, the median age of first-time buyers has increased to 40, highlighting the challenges of market entry.
The Zebra's national survey revealed that a significant majority of first-time homebuyers—74%—consider homeowners’ insurance a substantial part of their housing expenses. Moreover, 47% expressed concerns about managing mortgage payments should insurance premiums escalate further.
David Seider, The Zebra's Chief Commercial Officer, remarked on the situation, noting that even as housing affordability might see some improvement, the burden of rising insurance costs remains significant. He advises buyers to actively seek the best insurance deals by comparing multiple quotes and reviewing their coverage regularly. Seider also recommends inquiring about possible discounts, as insurers may offer savings for new or first-time homebuyers.
These insights are part of The Zebra’s 2026 State of Insurance™ | Home Report, which examines insurance costs, consumer behaviors, and housing trends throughout the U.S. The report highlighted that first-time buyers faced higher-than-expected insurance costs, with average premiums reaching $2,887 against an anticipated $2,692 in 2025.
Currently, the national average for homeowners’ insurance premiums stands at $2,966 annually, marking an increase of nearly 6% from the previous year. Variations in insurance costs are often linked to factors such as property value, age, and susceptibility to natural disasters. Florida continues to lead as the most expensive state for homeowners insurance, with premiums averaging $9,449 annually, influenced by hurricane risks, fraud, and operational expenses. Other states with high premiums, over $5,000 annually, include Oklahoma, Mississippi, Louisiana, and Nebraska, driven by wind and hail threats.
The survey also noted an interesting trend among first-time buyers: 40% of them chose homes built in 2020 or later, compared to 8% of other homeowners. Additionally, 83% of first-time buyers consider acquiring additional coverage in light of increasing environmental and economic risks. Demonstrating a higher engagement level, 55% of first-time buyers reported thoroughly reviewing their policies, in contrast to 22% of other homeowners.
Seider emphasized the growing importance of tailored coverage due to rising climate risks, advising potential buyers to research insurance options early and consider supplementary protections where necessary, as standard policies might not cover certain hazards like floods, earthquakes, or hurricanes.