Fast-rising homeowners insurance costs are eating into a larger part of virtually all Texans’ budgets — with lower-moderate-income residents particularly feeling the pain.
A new analysis by the Kinder Institute for Urban Research shows homeowners insurance premiums consumed about 4.6% of the median household income in the typical Texas county in 2024, up from 2.9% in 2009. The average annual premium in Texas reached nearly $3,000 in 2024, as catastrophic weather events and other pressures continued to drive up insurance costs.
The insurance spikes have hit less-affluent Texans harder during that stretch, the analysis showed. Average premiums rose from 3.7% to 5.8% of annual income for residents earning 80% of the median household income in the typical Texas county. By contrast, the rate increased from 2.4% to 3.9% for households earning 120% of the median income.
The findings are included in a wide-ranging report on Texas’ homeowners insurance landscape produced by the Kinder Institute’s Center for Housing and Neighborhoods.
“Housing costs include much more than rent or mortgage payments,” said Michelle Smirnova, the center’s director. “They also include utility bills, property taxes and insurance. When we talk about increasing housing cost burden, insurance is a key variable in that equation.”
As insurance costs have consistently risen across the state, researchers found aspiring and existing homeowners have reacted in different ways at different times, with decisions about owning and renting often connected to income.
From 2009 to 2019, homeownership rates among Texans earning less than 120% of the local median household income largely fell as insurance costs rose — an unsurprising result given historical trends. Yet during that time, there was a statistically significant increase in homeownership rates for residents earning more than 120% of the local median household income.
The dynamic potentially widened the divide between families who can build wealth through owning a home and those priced out.
But from 2019 to 2024, homeownership rates rose across both income brackets, even as premiums sharply increased. Researchers said robust housing demand during the COVID-19 pandemic and historically low mortgage interest rates coincided with the trend.
Now, as the housing market cools and mortgage interest rates remain elevated, some households might decide against buying a home or sell their property and return to renting if insurance premiums keep climbing.
“In the U.S., wealth growth still comes largely from homeownership in many cases, so that opportunity just goes away for them,” Aram Yang, a research analyst and a co-author of the report, said.
Compounding costs
Homeowners insurance costs in Texas rose sharply between 2009 and 2024, with the median annual premium across all counties totaling a 74% increase when adjusted for inflation. Median household income increased only 11% adjusted for inflation.
Much of the increase came in two waves. Premiums in the median Texas county jumped 31% between 2012 and 2016, a period that coincided with a 15-fold increase in weather-related lawsuits against property insurers, according to the advocacy group Texans for Lawsuit Reform.
The median premium rose another 18% in 2023 and 16% in 2024 on the heels of multiple major natural disasters. Winter Storm Uri in 2021 resulted in insurers paying $1.41 in claims for each dollar they collected in premium, while Hurricane Beryl in 2024 generated more than $2.5 billion in estimated insured losses.
At the same time, higher residential real estate prices and property taxes have made homeownership more expensive. In 2024, an estimated 64% of Texas households lacked sufficient income to afford the median-valued home in their county, assuming they spent no more than 30% of their income on housing costs.
Homeowners insurance is part of a broader affordability challenge facing Texans.
In a 2025 poll of 1,000 registered Texas voters by Texas 2036, a statewide public policy group that sponsored the Kinder Institute analysis, 79% of respondents said they would be more likely to support a political candidate who sought to reduce homeowners insurance costs. The rate ranked second-highest out of 13 options, trailing only reducing healthcare prices (82%) and just ahead of reducing property taxes (78%).
Seeking solutions for homeowners
As Texans clamor for homeowners insurance relief, policymakers have provided few answers.
Texas lawmakers have generally been reluctant to regulate insurance rates, in part because of concerns that insurers could reduce coverage or leave the state if forced to limit rate increases. The Texas Senate passed a bill in 2025 that would have required state regulators to approve rate increases above 10% before insurers put them into effect, but the House didn’t take up the legislation.
“The Legislature recognizes we have a relatively competitive insurance market in Texas,” said Jeremy Mazur, director of infrastructure and natural resources policy at Texas 2036. “Consumers have the power to shop around and choose homeowners insurance products that fit their budget or meet their desired levels of coverage.”
The Texas House also passed legislation last year with bipartisan support that provides grants to help homeowners install roofs designed to withstand severe weather, but the bill died in the Senate. In July, Gov. Greg Abbott announced a similar $400 million roof-fortification proposal as part of his affordability agenda ahead of the 2027 legislative session.
“For those who live in Texas, and especially in climate-vulnerable regions like Harris County and Houston, we need more preventive tools to mitigate extreme weather events, including finding a way to make it more affordable for everybody,” Yang said.
Mazur said the Kinder Institute report gives lawmakers data they can use when considering homeowners insurance policy during the upcoming legislative session. The policy debate, he said, ultimately extends beyond insurance regulation to the state’s broader aims for housing and household financial security.
“If the goal of state policy is to expand opportunities for Texans to own property and put down roots in Texas, then the current trend with homeowners insurance prices is certainly providing a challenge for some families to do that,” Mazur said.
