One out of every 4 homes is at ‘severe or extreme’ climate risk, study says

Overall, it finds that 26% of U.S. homes are at severe or extreme risk, with flood risks particularly underestimated by the federal government. Nearly 6 million homes ($3.4 trillion in value) face severe flooding in the next 30 years, about 2 million more than FEMA estimates, due to outdated flood maps. Major metro areas like Miami, New York, Tampa, Los Angeles, and Houston collectively hold hundreds of billions of dollars in at-risk property.

The number actually represents a drop from 2024’s edition of the same report, which found a whopping 44% and $22 trillion worth of homes were exposed, but Realtor.com’s chief economist Danielle Hale told Fortune the reports are not directly comparable. The 2024 edition includes five climate risks—flood, wind, fire, heat and air quality—while the 2025 edition includes only three. Even isolating the wind, flood and wildfire risks from the 2024 report yields a cumulative value of $14.1 trillion, a higher mark than the 2025 edition.

Hale also said Realtor.com partners on this report with First Street, a research firm that seeks to quantify risk for “every property in the country,” and their models may vary from year to year. Hale also noted some “pretty high-profile” climate events have occurred in between the two reports, such as the devastating LA wildfires, which Fortune reported consumed an estimated $150 billion worth of property wealth.

Flood, hurricane, and wildfire hotspots

Miami-Fort Lauderdale-West Palm Beach leads in total property value at risk of severe flood and wind damage, with all homes in certain metros such as Miami and Houston classified as highly vulnerable. New Orleans and several Florida metros show the highest share of homes exposed to flood risk relative to overall property value. California holds nearly 40% of the nation’s total wildfire-exposed property value, some $3.4 trillion, with Los Angeles and Riverside as the hotspots of concern. Outside California, western cities such as Colorado Springs, Colo., and Tucson, Ariz., also face high wildfire-related property threats.

Insurance premiums are surging in high-risk markets, with Miami homeowners paying an average of 3.7% of a home’s value in annual premiums—the nation’s highest rate. Flood insurance is often sold separately, hurricane deductibles can be five times higher than on standard policies, and wildfire coverage is often limited or unaffordable. Difficulty securing affordable coverage is contributing to “insurance deserts,” according to the World Economic Forum. Hale noted insurance is required with most mortgages, but for the millions of Americans who own their homes outright without a mortgage, they can go without insurance legally and are therefore vulnerable.

The sharp rise in insurance premiums, increased frequency of disaster events, and growing difficulty in securing coverage are reshaping not only where people live but also whether housing remains affordable in vulnerable regions. As insurance becomes harder to secure in risk-prone areas, markets in lower-risk regions are expected to see stronger home price growth due to climate-driven migration. Hale said Realtor.com has been running this report for five years and it’s “easy to forget about the sheer magnitude or the risks” from climate, “it easy to underestimate them,” and her firm hopes to equip homebuyers with enough information as possible going into a big decision.

Lost in the flood?

The Realtor.com study explains that First Street finds a large difference in at-risk home counts between its model and FEMA zones because the latter “do not account for heavy rainfall and future climate changes.” Realtor.com’s analysis finds that roughly 2 million homes, valued at almost $1 trillion, could be facing a flood risk that current homeowners don’t know about, and therefore they may lack flood insurance.

If major flood risk areas identified by the First Street are taken into account, this gap could be even larger. New York, Los Angeles, and San Francisco have the biggest gaps, in dollar terms. New York has a $95.3 billion vulnerability, according to the study, LA has $65.6 billion, and San Francisco has $54.9 billion.

The insurance and housing sectors are scrambling to try to get ahead of this ticking time bomb. Fannie Mae CEO Priscilla Almodovar wrote in the pages of Fortune in May 2024 she appreciated Beyoncé for her song “YA YA” on the “Cowboy Carter” album, where she sounded the insurance-desert alarm: “Wildfire burnt his house down/Insurance ain’t gonna pay no Fannie Mae.” Each year since 2021, she added, the U.S. has averaged 22 natural disasters with damage exceeding $1 billion, a stark contrast from the 1980s, when the average was three per year.

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.