Fed Reserve Chair: There Will Be Places “You Can’t Get a Mortgage”

Federal Reserve Chair Jerome Powell testified on the state of the economy before the Senate Banking, Housing and Urban Affairs Committee, February 11, 2025.

He might have added that some of those places include the most populace states in the country – California, Florida, and Texas.
Democratic Senator Tina Smith of Minnesota noted correctly that her own state had seen a 40 percent rise in home insurance prices in recent years, due to extreme storms, tornadoes, hailstorms and flooding.

Yahoo Finance:

The growing crisis in the insurance industry may make it hard to get a mortgage in parts of the country in the coming decades, Federal Reserve Chairman Jerome Powell said on Tuesday.

“If you fast-forward 10 or 15 years, there are going to be regions of the country where you can’t get a mortgage,” he said during his semiannual testimony to Congress, noting that banks and insurance companies have been pulling out of coastal and fire-prone areas they deem too high risk.

Insurers have been canceling policies across the country as climate change intensifies natural disasters, saddling them with multibillion-dollar losses. State Farm, for example, canceled thousands of policies in the Pacific Palisades neighborhood of Los Angeles months before it was devastated by wildfires.

Because mortgage lenders typically require homeowners insurance as a condition of making a loan, prospective buyers with few alternatives are increasingly purchasing coverage from state-designed insurers of last resort, which can have higher premiums and skimpier coverage than traditional alternatives.

Banks and insurers won’t keep making loans or providing coverage when faced with evidence of disasters, Powell said in response to a question from Minnesota Sen. Tina Smith.

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Video below has insights from Atmospheric expert Andrew Dessler, and a Wichita, Kansas report indicating locals are feeling the insurance pinch there as well.