New Rate Insurance data reveals a first sign of relief for borrowers as premium growth slows sharply after years of near-20% annual increases
Home insurance costs have more than doubled over the past six years, but a new industry report suggests the relentless pace of increases may finally be easing, offering mortgage brokers and their clients a narrow window to reassess coverage before the next cycle begins.
Rate Insurance, LLC, a subsidiary of Rate, released its 2026 Home Insurance Trends Report this week, drawing on more than 265,000 homeowners insurance policy records across all 50 states.
The report, now in its third year, finds that average premiums rose 9.16% in 2025, from $2,020 to $2,205. That's the first notable slowdown since 2019, after annual increases approaching 20% in both 2023 and 2024.
Since 2019, the average homeowners insurance premium has surged 107.6% nationally.
For mortgage brokers managing borrower qualification and escrow projections, the cumulative impact of that increase over six years has become a routine obstacle in closing deals.
"After several years of sharp increases, we're starting to see early signs that the market is stabilizing," said Jeff Wingate, president of Rate Insurance.
"Premiums are still elevated, but this shift gives homeowners a window to reassess their coverage, make informed adjustments and take a more proactive approach to managing long-term costs and their overall financial well-being."
Read more: Home insurance shock eases but costs stay elevated, Newrez finds
That kind of breathing room matters. Insurance now accounts for 9% of the typical homeowner's monthly mortgage payment, the highest share on record.
Brokers have been watching that figure climb for years. Darshit Chokshi, president and CEO of Aequitas Mortgage in Texas, previously told Mortgage Professional America that changes must be made to both building and insurance costs to help homeowners: "The primary issue with affordability is that construction costs are still too high." Insurance now compounds that pressure at every stage of the transaction.
Matt Gouge, mortgage broker and founding partner at UMortgage, has described the challenge of managing borrower expectations around post-close housing costs.
He noted that long-term affordability — covering insurance, taxes, and upkeep — is as critical as the purchase price itself.
Coverage gap widens as premiums outpace rebuild costs
One of the report's more pointed findings concerns the gap between what homeowners are paying and what their policies actually cover.
Coverage A, the dwelling coverage intended to pay for the cost of rebuilding the home, has increased 45.6% since 2019.
By comparison, premiums have risen 107.6% over the same period. That divergence means many borrowers may be paying significantly more while receiving proportionally less protection against a total loss.
The report also tracks a shift in how homeowners are managing rising costs.
Higher deductibles have become more common as a strategy to hold down premiums, though the tradeoff is greater financial exposure after a claim.
Insurers are increasingly using satellite imagery and artificial intelligence to evaluate roof conditions, more frequently limiting coverage, raising premiums, or shifting homeowners to actual cash value roof coverage for older roofs.
State disparities remain sharp
The national slowdown in premium growth does not mean uniform relief. Maine posted the largest year-over-year increase in 2025 at 21.4%, followed by Nebraska at 19.6% and Rhode Island at 18.1%.
Florida and Iowa saw far smaller increases, at 4.4% and 1.6% respectively.
Colorado carried the highest average annual premium in Rate Insurance's portfolio at $3,392, followed by Texas at $3,343, Oklahoma at $3,135, and Florida at $2,946. Washington, D.C., recorded the lowest average at $1,197.
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