The 12th national risk assessment: Property prices in peril

Valued at $50 trillion, residential real estate is the bedrock of the U.S. economy – nearly double the country’s $27.4 trillion GDP. Today nearly two-thirds of U.S. adults are homeowners, with homeownership being the ultimate sign of success for many Americans. However, environmental stressors and associated rising homeownership costs are together reshaping home values. With residential real estate representing one of the largest economic sectors in the country, these shifts will result in serious impacts that ripple through communities. Understanding these dynamics is crucial as public and private stakeholders navigate an increasingly complex landscape where housing decisions must balance traditional location value drivers with new climate realities.

In this report, First Street explores the indirect effects of both the acute impacts of climate damages on the costs of living via risk-based insurance premiums as well as chronic climate exposure and its impact on the livability of neighborhoods and the resulting movement of people. This analysis provides a comprehensive understanding of the effect of climate change on home valuation–through increasing costs of homeownership and shifting consumer perceptions that subsequently impact the demand for housing.