Key facts
- National homeowners insurance premium growth is slowing, but state-level markets are fragmented.
- Some states have completed rate corrections, while others are still experiencing increases.
- Regional premium increases range from 18% in the Northeast to 43% in the West.
- Non-renewal rates for homeowners insurance have significantly increased across all regions.
- Builder sentiment varies regionally, with the Midwest showing stronger conditions than the South and West.
- Insurance market conditions do not always align with regional buyer demand for new homes.
While national averages suggest a slowdown in homeowners insurance premium increases, the reality on the ground is far more varied, with significant regional differences impacting builders and their buyers. New research from S&P Global Market Intelligence indicates the U.S. effective approved homeowners rate change is projected to fall from approximately 13.6% in 2024 to 6.3% in 2025 and 1.8% through July 2026. However, S&P Global notes that 2026 is entering a "fragmented, state-by-state" phase, where some states have completed their rate corrections while others are still processing them. This means the national average is being pulled down by states further along in the process, even as others continue to see rate hikes.
A comparable finding comes from the National Association of Insurance Commissioners (NAIC), whose analysis of seven years of state-level data revealed inflation-adjusted premiums have risen 18% in the Northeast, 25% in the Midwest, 27% in the Southeast, and 43% in the West. The NAIC also reported climbing non-renewal rates, ranging from 96% to 216% depending on the region, indicating a market that remains outwardly steady but faces significant underlying pressure.
This regional disparity extends to builder confidence. The National Association of Home Builders' (NAHB) Housing Market Index, which gauges builder sentiment, stood at 35 nationally in August, marking the 16th consecutive month below the 40 threshold signaling sustained weakness. However, regional breakdowns show the Midwest at 45 and the Northeast at 44, while the South dropped to 31 and the West to 27. NAHB Chairman Bill Owens highlighted the Midwest as a "bright spot" with new home sales up over 2% year-to-date.
Builders can leverage this understanding of regional insurance and confidence data to tailor their sales strategies. A strong sales market in one division might be hampered by rising insurance costs and non-renewals, while a slower market in another might benefit from insurance certainty. Westwood Insurance Agency, with relationships across over 60 insurance companies, aims to provide market-specific guidance to help builders navigate these complex conditions.