In a reversal of migration trends over the past 25 years, Americans are beginning to move away from areas where the high risk of extreme weather events is pushing up the cost of property insurance.
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Residential real estate values have grown by more than $20T since 2020 — but insurance costs have also spiked by double digits on an annual basis since 2017. Now, states with the highest levels of climate risk are starting to see changes in migration as insurance costs begin to tarnish property values, according to data from real estate business intelligence firm Cotality.
“We just see very early signs that insurance premiums are having an effect on where people live,” John Rogers, chief data and analytics officer at Cotality, said onstage at the 2026 National Association of Real Estate Editors conference.
Sun Belt states that were development and migration darlings during the onset of the pandemic, like Texas, Arizona and Florida, have seen net migration turn negative, according to a Cotality analysis of U.S. Census Bureau data. Meanwhile, migration is accelerating in Illinois, New York and Michigan, which are less vulnerable to floods and extreme heat.
The cost of insurance is already showing up in property values, Rogers said. Research from Cotality — formerly CoreLogic — shows that for every 10% increase on insurance premiums, property valuations dropped by roughly 4.6%.
The findings align with research from climate risk data firm First Street, first reported by Bisnow, that shows commercial property values in climate-sensitive markets are 17% lower than less vulnerable areas.
Property damage from extreme weather events is only one part of the calculation for insurers: The price of rebuilding after property damage is also surging due to a spike in construction materials pricing.
Overall inflation for construction inputs has risen at twice the rate of the Producer Price Index, Rogers said. That is driving up premiums even as insured losses came down last year.
“Reconstruction costs are getting more expensive,” he said.
Residential properties that Cotality classifies as high risk — scoring 70 out of 100 for likelihood of a climate event — currently account for 12% of all U.S. residential properties and would cost $4.6T to replace.
As climate risk increases across the country, one-fifth of all housing will move into the high-risk classification, with a replacement cost of $7.8T, according to the firm’s data.
“To rebuild the whole United States, in terms of residential, was about $43.8T,” Rogers said. “Obviously, well worth protecting.”
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