Growing economic burdens due to climate change are increasingly playing a role in where people can afford to buy homes and where companies can afford to do business, with disruptions to the property and casualty insurance market bearing clear evidence of that trend.

Once a box-checking exercise in mortgage qualification, a borrower’s ability to afford homeowners insurance has now become a question that lenders and originators are asking from the get-go. Homeowners insurance accounted for almost 10% of the typical monthly mortgage payment at the end of the second quarter, according to ICE Mortgage Technology.

Insurance premiums were about 80% higher nationwide in June compared with early 2020 levels. But climate-driven housing costs also include damage to public infrastructure and the loss of outside investment, which can increase utility bills and tax burdens for homeowners.

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Though it can take years for such local or regional impacts to unfold, the long-term consequences are increasingly relevant as homeowners stay in their properties for longer amid historically low housing turnover.

Homebuyers in 2026 would do well, experts say, to consider how flood, wildfire, wind or severe convective storm risks may shift in their area over their likely ownership horizon.

A newly released ranking by Cotality assesses which states face the highest and lowest risks from extreme weather over roughly the next two decades. Louisiana, Mississippi and Florida top the list of riskiest states.

However, the rankings also highlight what may seem like counterintuitive information for consumers, Cotality Chief Scientist Howard Botts observed in the report.

“West Virginia doesn’t have headline-grabbing hurricanes or wildfires, but its topography leaves it highly exposed,” said Botts, noting that the state ranks as the fourth riskiest based on average annual loss across all perils. For a state with just 900,000 homes, the nearly $1 billion in yearly damages represents a “substantial burden,” he said.

“Much of its housing sits in mountain valleys, so as the region gets wetter, flood risk is rising sharply,” Botts added.

A range of perils have intensified in frequency and severity over the past decade across a broad array of local and regional housing markets spanning the entire U.S.

By 2050, the average annual losses to property could increase by 47% across the 10 riskiest states and by 38% in the 10 safest states, according to Cotality. The largest losses are expected to be caused by flooding, hurricanes and severe convective storms.

Currently, the 10 safest states account for about $11 billion in average annual losses, compared with more than $43 billion across the 10 riskiest states.

Florida’s annual average losses from all perils are projected to jump 62.3% to $17.5 billion in 2050 from current levels around $10.8 billion. Mississippi’s losses are projected to increase 54%, from $2.9 billion to $4.5 billion.

California has the largest number of properties exposed to extreme weather risks, with wildfire losses projected to roughly double by 2050.