The Zebra, an insurance comparison platform, has warned that rising homeowners’ insurance premiums could place significant financial pressure on first-time homebuyers.
The company’s latest analysis of the US home insurance market suggests affordability challenges are intensifying as insurance costs rise alongside broader housing expenses.
According to the research, first-time buyers now account for just 21% of all home purchases, continuing a steady decline from 24% in 2024 and 40% prior to 2008. At the same time, the median age of first-time buyers has climbed to 40, highlighting the increasing difficulty of entering the housing market.
Insurance costs are becoming a key contributor to that pressure. A national survey conducted by The Zebra found that 74% of first-time homebuyers say homeowners’ insurance represents a significant portion of their housing budget, while 47% said they would struggle to pay their mortgage if premiums increased further.
David Seider, Chief Commercial Officer at The Zebra, said: “While housing affordability is anticipated to improve this year, it’s clear that first-time buyers still face significant affordability challenges, especially when factoring in rising insurance costs. It’s critical to make sure you’re getting the best value for your dollar. Shop around, compare a few quotes, and don’t just set it and forget it — check in on your coverage regularly to make sure it still fits your needs. And don’t be shy about asking for discounts either — some insurers offer savings for new or first-time homebuyers that are worth taking advantage of.”
The findings come from The Zebra’s 2026 State of Insurance™ | Home Report, which analyses insurance costs, consumer behaviour and housing trends across the US.
The report found that first-time buyers expected to pay an average of $2,692 for home insurance in 2025, but actual premiums averaged $2,887, reflecting higher-than-anticipated costs.
Across the US, the average annual homeowners insurance premium now stands at $2,966, representing nearly a 6% increase compared with 2025. However, costs vary significantly depending on property value, age and geographic exposure to natural hazards.
Florida remains the most expensive state for homeowners insurance, with average premiums reaching $9,449 per year, largely driven by hurricane exposure, high insurance fraud rates and rising operational costs.
Other states with average premiums exceeding $5,000 annually include Oklahoma, Mississippi, Louisiana and Nebraska, where wind and hail risks significantly influence insurance pricing.
The survey also found that 40% of first-time buyers purchased homes built in 2020 or later, compared with just 8% of other homeowners, suggesting newer properties are increasingly favoured.
Additionally, 83% of first-time buyers said they are considering adding additional coverage in the coming year as environmental and economic risks increase.
First-time buyers also appear more engaged in the insurance purchasing process, with 55% reporting they read their policy thoroughly, compared with 22% of other homeowners.
Seider added: “With climate risks on the rise, it’s more important than ever to make sure you have and maintain the right coverage for your home. Start shopping for insurance before you even make an offer so you know what to expect and can factor it into your budget. And depending on where you live, it’s worth considering additional coverage — standard policies don’t always include risks like floods, earthquakes, or hurricanes.”
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