Homeowners insurance costs continued rising in 2025, but at a slower annual rate than recent years, new figures published Monday by ICE Mortgage Technology show.
Average monthly homeowners insurance premiums reached $201 last year, the highest level on record. That works out to $2,412 annually, which is a $149 or 6.6% increase from 2024.
Average premiums had risen by 13.8% in 2024, 13.7% in 2023, 11.6% in 2022 and 7.4% in 2021.
The less dramatic increase reflects slower growth in both coverage amounts and cost per coverage. The 4.6% annual rise in coverage amounts was the smallest increase since 2020, while the cost per $1,000 of coverage was higher by just 2% annually compared to a 14% increase over the prior two years.
The numbers were released as part of a monthly report on mortgage performance compiled by ICE, a market intelligence and data analytics provider.
Though smaller in dollar amount, the relative gains in homeowners insurance costs since 2019 have surpassed all other aspects mortgage payments, according to ICE, inclusive of principal, interest, property taxes and homeowners insurance.
With total mortgage payments roughly 33.1% higher over the six-year period from December 2019 to December 2025, the property insurance portion of monthly mortgage payments has ballooned 71.8% compared to 31.2% growth in the property tax portion, 34.8% growth in interest payments and 22% growth in loan principal.
The average property tax bill was around $3,100 in 2025, according to a recent analysis by WalletHub, though there are notable gaps between different states’ effective property tax rates.
Property taxes and insurance have been making or breaking deals for all manner of buyers in recent years. More than 80% of home flippers reported insurance issues causing them to miss out on a deal last summer, compared to 44% for rental investors, according to an industry survey conducted by wholesale investor-lender RCN Capital.
ICE further underscored that regional variations largely determined insurance cost fluctuations in 2025. After registering some of the largest annual increases in insurance costs in recent years, for example, parts of Florida and Texas posted annual declines in insurance costs in 2025.
The largest drops in annual insurance premiums were observed in Cape Coral, Fla., where they fell 6.1%; El Paso, Texas, down 5.6%; Jacksonville, Fla., down 5.6%; and North Port, Fla., down 5.1%. The report underscored that these gains were largely driven by lower costs per $1,000 of coverage.
At the same time, an alarming number of borrowers report not knowing that monthly payments on fixed-rate mortgages with escrow accounts can increase due to the fluctuating ancillary costs of homeownership.
Many of the pressures sending insurance costs higher in 2025 remain entrenched, according to a year-end report published in December by Matic, an insurance technology platform. The report noted that home insurance premiums increased by an average of 8.5% in 2025, following gains of 18% in 2024 and 11.6% in 2023.
“For the mortgage industry, these trends are becoming increasingly difficult to ignore,” the Matic report read, with elevated insurance costs “directly impacting borrowers’ debt-to-income ratios, delaying closings, and, in some cases, preventing borrowers from qualifying altogether.”
Taxes and insurance now account for 21% of homeowners’ monthly mortgage payments across 450 of the largest U.S. metros, a recent Neighbors Bank analysis found. First-time and low-downpayment homebuyers are more likely to feel the budget pressures of rising escrow costs because that group of buyers is more likely to have their taxes and insurance bundled into an escrow account instead of paying an annual lump sum.
