Around the Industry: Affordability, Climate Risks, and Tariffs Dominate Latest Matic Trends Report (August 2025)
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By Matic
2025 began with a slight reprieve in the pace of rising home insurance premiums. But several challenges pose long-term threats to policy affordability, while many lenders continue to experience insurance-related closing delays.
New Matic report reveals rate hikes are slowing, but long-term challenges persist
Matic recently released a report outlining the causes and impact of the turbulent home insurance market. Here are some of the key highlights on premiums and coverage changes, plus how mortgage lenders are being impacted and how they can support home loan applicants to close on time.
- Home insurance premium increases are still occurring, but have slowed in comparison to previous years. So far in 2025, rates are up 9.3% from 2024, vs. a 19% jump in 2024.
- Both pricing and availability have been impacted by nationwide climate-related events. Historically, coastal areas bore the brunt of high-risk weather events, but severe storms in the central U.S. are the latest driver of premium increases in the country.
- Tariff announcements have already impacted new home construction costs. In April, 60% of builders reported supply price hikes were already in place. The National Association of Home Builders estimates an average $11,000 price increase on a new-build due to tariff price hikes, which will in turn directly affect home insurance premiums.
Did you know? Higher deductibles are becoming an increasingly common way to offset premium prices. Matic found a 25.4% increase in the average deductible from 2024 to 2025, compared to just 15% the previous year.
Homeowners insurance and mortgage origination: what’s the impact?
The latest Matic report also uncovered the impact of home insurance premiums on the mortgage industry. 64% of lenders surveyed report issues with closing due to home insurance either frequently or somewhat frequently over the last year. The primary reasons are high debt-to-income ratios and longer timeframes to secure coverage.
Additionally, 72% of lenders surveyed are very concerned about how economic changes and uncertainty could impact both home insurance and the mortgage process. Being proactive in helping mortgage applicants secure a policy as early as possible could minimize the risk of delay.
Pulse check: how Matic is shaping headlines
Our report is helping to inform media coverage of home insurance, affordability, mortgages, and more.
“In some cases, homeowners are now spending more than half of their monthly mortgage payment on insurance and taxes,” said our CEO Ben Madick. (Featured in MPA Magazine).
“We’re hearing from lenders who are seeing closings fall through or get delayed because of insurance hurdles,” said our CEO Ben Madick in the report. (Featured in The MortgagePoint).
“Still, premiums have risen 45% since 2022, while Coverage A, which reflects the insured value of the home, has grown less than 12%.” (Featured in HousingWire).
What we’re reading: Summer home insurance news
Illinois governor takes on State Farm price hikes: Governor JB Pritzker of Illinois is calling on state legislators to take on insurance premium increases in the upcoming fall veto session. While he didn’t propose specific policy recommendations, the comments were made in response to State Farm’s notification to the state that it would be raising insurance premiums by 27.2%. (Insurance Business)
Beachfront Malibu lots hit the market for millions after wildfire damage: California’s popular Malibu area was devastated by wildfires in early 2025, but those empty lots have already hit the real estate market. Despite multi-million dollar price tags, buyers will likely have trouble insuring future properties at affordable prices, or at all. That could present a problem in getting approved for financing. (Business Insider)
New data reveals states with the most mortgage delinquencies: Some homeowners are struggling to keep up with mortgage payments amidst higher home insurance premiums and property taxes. A newly published map reveals the highest risk states, including Florida, South Carolina, and Louisiana. (Newsweek)
