More examples of how climate is making us poorer.
Paradoxically, as homes are getting further out of reach for young people, those who own homes are at greater risk of losing value with changing climate risks.
It’s no surprise that home purchasing costs have soared, with mortgage rates hovering near two-decade highs and property prices breaking records. What’s shocking is how quickly prices have ballooned out of reach. The annual income needed to afford monthly payments on a median-priced home in the US was $126,670 in 2024—a 60% jump from $79,330 in 2021, according to the Harvard Joint Center for Housing Studies. Meanwhile the US median household income was $80,610 in 2023, the most recent year for which data is available, up just 1.3% from three years earlier. “There’s no rush to be a homeowner given that differential,” says Laurie Goodman, founder of the Housing Finance Policy Center at the Urban Institute.
For decades part of the logic for buying a house was that, after the down payment, mortgage payments were generally cheaper than renting. Ultrapricey cities such as New York and San Francisco were the exception. Well, no more: As of June, renting was on average $908 a month cheaper than buying a starter home, and the cost of owning was higher in 49 of the 50 largest US metro areas, according to Realtor.com. Pittsburgh is the last major city where owning is cheaper than renting. In 2021, when mortgage rates were at rock bottom, buying was still as cheap or cheaper than renting in 21 markets, including Atlanta, Cleveland, Philadelphia and Tampa, Florida.
The costs associated with homeownership are all spiraling upward, particularly as climate change exacts its toll. The average insurance bill has jumped 74% across the US since 2010, thanks to the growing prevalence of floods, wildfires and other disasters, according to Cotality, a real estate data service. From 1980 to 2024, Texas—one of the country’s hottest housing markets, with vast stores of land and few rules around development—has led the country in annual disasters exceeding $1 billion in damage. It had 20 such events in 2024, up from five in 2014. That was before July’s flash floods killed at least 135 people in an area with tens of thousands of buildings.
As home prices soar, so do assessments; in Florida, for example, property tax bills rose almost 50% from 2019 through 2024, according to Cotality. Property taxes jumped 33% in Dallas and 32% in Clark County, Nevada—home to Las Vegas—over the same period.
Building or buying a new house costs even more than purchasing an existing home, and President Donald Trump’s tariffs are making the materials more expensive. Another cost pressure: Immigrant workers—the majority of plasterers, drywall installers, roofers and painters—are going into hiding as US Immigration and Customs Enforcement raids terrorize their communities.
Homeownership has long been a prime symbol of having “made it” in American society. The Founding Fathers saw it as a prerequisite for the right to vote. After World War II, tax benefits and appreciating values turned homes into a kind of passive savings account that owners could pass on to descendants.