After several years of sharp increases, premium hikes for home insurance increased in 2025 at less than half the rate they did in 2024.

Premiums only rose an average of 8.5% this year — compared to 18% last year and 11.6% in 2023, according to a year-end report published by insurance technology platform Matic.

“Carriers are back to rate adequacy, technology is helping them assess risk more accurately, and calmer weather in the latter half of the year gave the market a chance to steady,” said Ben Madick, co-founder and CEO of Matic, in a press release.

Still, home insurance premiums remain at record levels, comprising roughly 9% of the typical homeowners’ monthly mortgage payment.

“For the mortgage industry, these trends are becoming increasingly difficult to ignore,” the report read, with elevated insurance costs “directly impacting borrowers’ debt-to-income ratios, delaying closings, and, in some cases, preventing borrowers from qualifying altogether.”

The states with the steepest rate hikes in 2025, due to various factors such as exposure to extreme weather, regulatory constraints and reconstruction costs, were Georgia (28.4%), Colorado (25.7%), New York (23%), Texas (20.5%) and Mississippi (19.4%).

Skyrocketing premiums have coincided with reduced coverage, shifting more of the financial responsibility of home protection to homeowners. Average deductibles rose 22% in 2025, according to the report.

Insurance availability improved in 2025, with the number of average quotes per person rising 78% from a low in 2024.

Still, homeowners in high-risk areas in the largest housing markets in the U.S. — California, Florida and Texas — relied heavily on “excess and surplus” lines to cover perils like wind or hail that standard home insurance policies do not cover.

The specialty lines accounted for 16% of Matic policies in the states as of the end of 2025, up from less than 2% in 2023.

Many of the pressures that have pushed premiums 64% higher since 2019 are likely to persist next year, amid broader housing affordability challenges facing mortgage borrowers and current homeowners.

“Homeowners are still facing very high costs, and climate-related uncertainty will continue to drive pricing and affect affordability in 2026,” said Madick.