How climate change is shaping homeownership decisions

Homeowners Face Growing Financial Concerns as Climate Risks Increase

With temperatures on the rise, homeowners are becoming increasingly worried about the financial implications of climate change.

A recent survey by LendingTree found that 51% of homeowners are concerned about climate-related hazards affecting their homes, with millennials showing the highest level of worry at 63%. The top threats identified by respondents include severe storms, hurricanes, and flooding.

The survey also revealed that more homeowners are considering relocating from high-risk areas, with 34% of those living in at-risk regions thinking about moving and 13% having already made the move. Additionally, 72% of respondents believe that climate change risks should be disclosed during the homebuying process.

According to a Redfin survey, nearly 39% of real estate agents believe that climate change is influencing consumer choices about where to live and what homes to buy. The survey also showed a split in opinions among agents, with 18.4% reporting more concerns about climate change and 17.8% reporting less concerns.

LendingTree reported that 57% of homeowners are willing to pay more for homes in lower-risk areas, and 17% have been discouraged from purchasing homes due to climate concerns.

Concerns about rising insurance costs were also highlighted, with 70% of respondents expecting climate risks to lead to higher premiums. Approximately 21% have already seen an increase in insurance costs, and 38% have purchased additional coverage.

The cost of a standard homeowners insurance policy in the U.S. has risen to $2,801, a 40% increase from 2019, due to factors such as extreme weather events, inflation, supply chain disruptions, and the rising costs of rebuilding after claims, as reported by Claims Journal.

Homeowners Embrace Environmental Sustainability

Aside from concerns about climate risks, homeowners are also showing a growing interest in reducing their environmental impact.

According to the survey, approximately 68% of homeowners consider environmental sustainability to be at least somewhat important when deciding to purchase a home, with higher percentages among parents with children under 18 (79%) and millennials (78%).

About 65% of homeowners have invested in renewable energy systems to mitigate climate change risks and reduce their environmental footprint. Popular investments include energy-efficient appliances, HVAC systems, smart thermostats, weatherproofing, solar panels, rainwater harvesting systems, and green roofs.

Oakwood Homes offers energy-efficient homes in the Denver area starting in the low $300s.