Climate change to slash $1.5 trillion from U.S. home values, report finds

Climate change is poised to significantly diminish U.S. home values, erasing an estimated $1.47 trillion over the next three decades and exacerbating economic disparities across communities, according to a new report. The study by the First Street Foundation highlights how climate change impacts real estate markets and regional economies.

Already escalating insurance rates are making large parts of major U.S. cities unaffordable. As property values nationwide are projected to decline by nearly $1.5 trillion in total, some properties will see an increase in value, amounting to $244 billion. By 2055, climate-driven weather events are expected to drive up homeowners' insurance premiums by an average of 29.4% across the country.

Simultaneously, climate-related migration driven by extreme heat, wildfires, and flooding is anticipated to cause 55 million Americans to relocate within the U.S. over the next 30 years, with over 5 million expected to move this year alone. "Climate change is no longer a theoretical concern; it is a measurable force reshaping real estate markets and regional economies across the United States," stated Jeremy Porter, First Street's head of climate implications research. "Our findings highlight the urgent need to understand how rising insurance costs and population movements are transforming the economic geography of the nation."

The report also points to the disproportionate impact on certain regions. The three largest Sun Belt states, California, Florida, and Texas, have absorbed more than 40% of the nation's $2.8 billion in natural disaster costs since 1980. In another 30 years, First Street's data projects a more than fourfold increase in premiums in Miami, a tripling in Florida's Jacksonville and Tampa, and in New Orleans, and a doubling in Sacramento, California. Some counties in California, Florida, and Texas could face net declines of 10% to 40% in their property values by 2055. This comes after a recent month saw devastating wildfires in the Los Angeles area, resulting in numerous deaths, tens of thousands of evacuations, and the destruction of thousands of structures.

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Climate change is no longer a theoretical concern; it is a measurable force reshaping real estate markets and regional economies across the United States. Our findings highlight the urgent need to understand how rising insurance costs and population movements are transforming the economic geography of the nation.