Look, I want to walk you through what HousingWire is reporting about homeowners insurance costs, because it's affecting every single person I work with right now. According to their latest data from the Intercontinental Exchange Mortgage Monitor, homeowners across the country are paying an average of $209 every month just for property insurance in the second quarter. That's eating up nearly ten percent of what people's monthly mortgage payments look like, and it's dramatically higher than where we were just a few years ago.
The good news, if there is any, is that the pace of these increases finally seems to be cooling down a bit. The quarterly jump from the first quarter to the second was only 1.8 percent, which is the smallest bump they've seen since they started tracking this number. On an annual basis, costs went up 8.7 percent, which is still significant but notably lower than the double digit increases we saw earlier in the year and back in 2024.
Here's what's interesting about where that money is going. About two-thirds of the annual increase is coming from homeowners needing higher coverage limits, not necessarily because per-unit insurance prices are skyrocketing the way they were. Coverage limits themselves went up 5.5 percent, while the actual cost per thousand dollars of coverage only increased 3 percent. This is a meaningful shift from what we saw in 2024, when pricing was driving most of the growth.
Now, the real story here is that insurance costs are wildly different depending on where you live. In New Orleans, insurance represents nearly a quarter of someone's mortgage payment, while in San Jose it's only about four percent. Markets that have dealt with hurricanes, wildfires, and hail are seeing the biggest jumps, with places like Sacramento and San Diego both hovering around 12 percent annual increases.
Here's something that really caught my eye. If you switched insurance carriers in the past year, you saved an average of 6.6 percent on your premiums, which is the largest savings HousingWire has ever recorded. People who made the switch saved about $440 a year compared to people who just stayed put. Meanwhile, folks who didn't shop around saw their premiums rise 10.4 percent, and they actually ended up with higher deductibles.
What I'm seeing locally here in the Bay Area is that we're in a much better position than many other parts of the country, especially for folks in the San Jose area. But that doesn't mean we can ignore this trend. For my clients buying or selling in Fremont and throughout the East Bay, it's increasingly important to factor insurance costs into the real affordability picture, not just the mortgage payment. And if you haven't shopped your insurance in a while, the data is pretty clear that it's worth picking up the phone and calling around, because the difference between staying with your current carrier and switching can really add up.
