Around the Industry: Credit Scores and Buyer Sentiment (September 2025)
Reading time • 1 min
By Matic
Homebuyers have already been navigating a tough real estate market with rising list prices and high interest rates. Now, they’re adding home insurance to their list of worries — and research shows it’s impacting where they look for a new home. We look at fresh data on just how much credit scores impact premium costs, plus rising monthly homeownership costs across the U.S.
These issues can impact how you interact with both loan origination and servicing customers. Find out more so you can stay on top of the latest concerns for buyers and homeowners.
75% of homebuyers worry about insurance affordability
A Realtor.com survey recently showed that 75% of homebuyers are concerned by rising homeowners insurance costs. On top of that, 46% expect or have experienced difficulty in either getting a new policy or renewing their existing one. Even more revealing is that one in three buyers have altered the geographic location of their home search to factor in insurance premium costs.
Read the full survey results at Realtor.com.
New research reveals direct link between credit score and home insurance premium costs
The Consumer Federation of America and the Climate and Community Institute found that having a low credit score can cause homeowners insurance premiums to nearly double compared to those in the same area with a high score. They’ll pay nearly $2,000 more per year. And for those with middle-of-the-road scores (around a 740), the average annual premium increase is $792.
Search the Climate and Community Institute’s interactive map to find the average credit score penalty for nearly every county in the U.S.
Monthly cost of homeownership rose 4% in 2024
New data from the Census Bureau reveals that the overall median cost of homeownership jumped to $2,035 in 2024, up from $1,960 the previous year. That represents a 4% annual increase. Areas with the highest homeownership costs include Washington, D.C., California, Hawaii, New Jersey, and Massachusetts. Cumulative rising costs could impact buyer budgets in many markets across the U.S.
Washington, Illinois, and Florida updates: Good news and bad news depending on where you live
- Dropped policies in Washington state increase 23%: So far in 2025, insurance companies have dropped homeowners coverage for 33,000 policyholders, largely due to the increased risk of wildfires. One homeowner reported shopping around for new policies, with the cheapest option resulting in a 780% increase compared to his previous rate.
- Insurance research group warns Illinois lawmakers over interfering with State Farm premium increases: Governor J.B. Pritzker called for additional oversight following State Farm’s suggested 27% premium increase for many homeowners in the state. But the Insurance Information Institute recently warned against the government manipulating insurance markets. The organization argues that State Farm uses actuarially proven pricing models and interference could result in lost coverage options in Illinois.
- Florida homeowners seeing relief in policy availability and premium price hikes: Research shows that Floridians only saw a 1% price increase in premium prices last year — the smallest change in the nation. On top of that, new insurers entering the market have led to tens of thousands of policies moving from state-run insurance to more affordable private policies.
