Should I consider climate changes when buying a new home?

Climate change is on our doorstep, so now more than ever, it’s essential to consider the local climate when buying a new home. Not only is the current climate important, but experts suggest homeowners look towards the future. How will the next 10, 20 or 30 years impact your new purchase? 

The increasing frequency of floods, wildfires, and extreme heat could mean more expensive insurance, less competitive mortgages, and lower resale values if you buy a home in the wrong area.  

Flood Insurance is often overlooked

Along the coasts, flooding has become a frequent hazard because of rising sea levels while more inland homes must deal with torrential rains that can lead to flood damage. Unfortunately, a standard homeowners policy almost always excludes flood damage, which means homeowners must buy a separate flood insurance policy to be fully protected.  Most flood insurance is backed and sold by the federal government’s National Flood Insurance Program, but private market policies are available in many areas. 

If your new home is in a flood zone that’s been rated as risky by the Federal Emergency Management Agency or FEMA, your mortgage lender might require you to purchase flood insurance.

According to FEMA, “Any place with a 1% chance or higher chance of experiencing a flood each year is considered to have a high risk. Those areas have at least a one-in-four chance of flooding during a 30-year mortgage.” 

FEMA regularly updates their flood maps to reflect changing risk levels and improvements that have been made in the technology they use as well as their mathematical models. In 2024, new flood maps added thousands of homes to the high-risk category. For example, in South Florida, nearly 140,000 homes were moved into the high-risk classification.

Though high-risk zones face the  most danger, any area can experience flooding. According to the FEMA website, “Floods occur naturally and can happen almost anywhere. They may not even be near a body of water, although river and coastal flooding are two of the most common types. Heavy rains, poor drainage, and even nearby construction projects can put you at risk. Statistics show that people who live outside high-risk areas file more than 25% of flood claims nationwide.” 

Because of this risk many homeowners may want to consider flood coverage, even if they aren’t required to have it. While premiums can vary according to risk, the average cost is currently $1,290 a year which is surprising uptick given that in 2023 the average was just $786 a year. 

However, not everyone pays the average. As the Miami Herald reported in 2023, residents of one ZIP code in Miami/Dade County were paying average premiums of $7,097, based on the new pricing model. 

What makes the situation worse is that under the NFIP’s Risk Rating 2.0. program flood insurance rates are allowed to rise up to 18% a year. Families that can hardly afford their coverage now may find themselves in an impossible situation just years down the line. 

In order to get an estimate on the cost of flood insurance, you can go to the National Flood Insurance Program and enter your address as well as details about the size and construction of the house. 

Fire Risk is becoming a major risk factor

Thankfully, fire damage is typically covered under a homeowners’ policy. However, as climate change takes hold, more policyholders than ever are submitting claims due to fire-related damage. 

According to the U.S Environmental Protection Agency (EPA), the U.S. has an average of 70,000 wildfires a year. While the number hasn’t changed much since the 1980s, the severity of fires has grown dramatically. More acreage is consumed, and more houses are destroyed every year. According to the EPA website, “of the 10 years with the largest acreage burned, all have occurred since 2004. … This period coincides with many of the warmest years on record nationwide.”

More than 80% of wildfires are caused by human action, according to the National Park Service. This typically means campfires that weren’t put out right, or casually discarded cigarettes start a fire. However, the massive droughts that have been brought about by climate change help wildfires fires spread far and fast. 

Fires can happen almost everywhere. While often unpredictable, they tend to be concentrated in certain parts of the U.S. According to a recent Investopedia article, in 2024, wildfires destroyed 2,406 residences in the U.S., with the vast majority of them in either the American Southwest (1,010), Southern California (552), or Northern California (462). 

Large wildfires increase insurance rates, can make insurance harder to find and may make mortgage lenders less likely to approve a loan. Another unfortunate side effect of  wildfires is an increased flood risk due to the burning away of vegetation that would otherwise absorb the downpour.

While it’s impossible to avoid the risk of fire altogether, house hunters can look out for a few features that will protect their home and their insurance rates. Noncombustible or fire-resistant roofs, exterior walls, or minimal flammable vegetation are all ways to minimize risk. It’s also essential to investigate the rest of the community, because when whole communities are protected, it drastically lowers the risk of your house catching on fire. Some states offer incentives, such as discounts on insurance rates, to encourage homeowners to make their homes more resilient. 

Climate change has also been bringing the heat in ways that don’t include floods and fires. 

Extreme heat should be on every homeowner’s mind when choosing where to settle down. Most parts of the country have seen temperatures spike in recent years, but certain areas have been hit harder. According to a recent Investopedia article, the extreme heat belt stretches from the Northern Texas and Louisiana borders to Illinois, Indiana, and even into Wisconsin and the 1,023 counties in the belt may see heat as high as 125°F by 2053. 

Heat can be dangerous for you, your pets, and the rest of your family while also pushing up your energy costs as more people rely on air conditioning to keep their homes livable.

Air quality is also becoming more of an issue. While government efforts have attempted to reduce pollution, wildfires, extreme heat and drought can lead to pollution such as increased ozone and particulate matter in the air, according to First Street Technology. 

To reduce risks, even if you’re living in an area with poor air quality, consider looking into communities that have already taken steps to improve their air such as investing in green spaces and public transit to cut back on community members’ reliance on cars. 

Climate change is no longer an avoidable problem. Homeowners should take it into consideration when shopping for a home. If you are house hunting, be sure to consider and investigate not only the current risk, but future risks as well.