As Texas leaders search for ways to rein in soaring homeowners insurance costs, new research suggests premiums are playing an increasingly important role in housing affordability across the state.
When homeowners insurance is factored into the cost of homeownership, nearly two-thirds of Texas households can no longer afford the median-priced home in their county, according to a new report from the Kinder Institute for Urban Research and Texas 2036, a statewide public policy organization.
Researchers estimate about 7 million Texas households, roughly 64% statewide, cannot afford the median-priced home in their county.
“Homeowners insurance has become an increasingly important part of the housing affordability conversation because median insurance costs have increased at a higher rate than home purchase prices,” said Steve Sherman, associate director of research at the Kinder Institute's Center for Housing and Neighborhoods.
The report, The Insurance Squeeze: Rising Premiums, Affordability and Income Inequality Across Texas Counties Since 2000, analyzed homeowners insurance premiums across all 254 Texas counties alongside home values, household income and demographic data spanning more than two decades.
While much of the public conversation has focused on why insurance premiums continue to climb, the research examines how those rising costs are affecting housing affordability across Texas.
Homeowners insurance premiums have increased much faster than household incomes. Between 2009 and 2024, premiums rose 74%, while median household income increased just 11%. Over the past five years alone, premiums climbed 30%, compared with approximately 3% income growth.
Keeping a home insured is also consuming a larger share of the family budget than it did 15 years ago. In the median Texas county, homeowners spent about 2.9% of household income on insurance in 2009. By 2024, that figure had climbed to nearly 4.7%, with an even greater burden on lower-income households.
“Texas is a huge state with very different housing markets and climates that can affect insurance prices, but one thing remains consistent across the state; homeowners insurance costs have become a growing affordability challenge nearly everywhere,” Sherman said.
The report was produced in partnership with Texas 2036, whose recent statewide voter poll found that nearly four in five Texans have seen their homeowners insurance costs increase over the past five years, making it one of the state’s top affordability concerns.
“Texas voters told us in our polling that their insurance costs are climbing. This analysis quantifies it,” said Tracy Ayrhart, vice president of data and research at Texas 2036. “Premiums are now a large enough share of housing costs that a single year’s increase can price tens of thousands of households out of buying a home. What we still can’t see is how households are absorbing it. That’s the question worth taking up next.”
Researchers estimate that a 10% increase in homeowners insurance premiums would push nearly 50,000 additional Texas households beyond the affordability threshold, making the median-priced home in their county out of reach.
The report also found the burden is not shared equally. Lower-income households face the greatest affordability challenges, while Black and Hispanic households experience substantially larger homeownership affordability gaps than white and Asian households. Although affordability pressures are greatest in fast-growing metropolitan areas such as Houston, Dallas and Austin, many rural counties are also facing disproportionately high insurance burdens relative to home values.
The researchers say the findings highlight a shift in the state’s housing landscape. Home prices, mortgage rates and property taxes have long shaped conversations about affordability. Now, homeowners insurance belongs in that conversation as well.
“Without some kind of policy change or market disruption, homeowners should hope for the best but prepare for the worst by factoring rising insurance costs into their long-term housing budgets,” Sherman said.