Insurance makes up about 7% of homeownership costs
Property insurance makes up about 7% of homeownership costs on average across the United States' 50 largest metropolitans, a new analysis found.
In dollar values, that translates to about $145.66 of the total $2,077.58 in homeownership costs, according to the ValuePenguin study released Tuesday. The report analyzed data from the U.S. Census Bureau.
There are stark regional variations in cost, though, according to Rob Bhatt, ValuePenguin home insurance expert and licensed insurance agent.
"There’s some price volatility within these averages," he said in a statement. "Several parts of the country have seen the cost of home insurance — a type of property insurance — go up by a significantly higher amount than income growth. In these areas, the rising cost is putting strains on families' budgets."
In Miami, for example, insurance accounts for 13.1% of homeownership costs and in Oklahoma City, it makes up 13% of costs.
"Insurance companies have had to pay to rebuild more homes than normal," Bhatt explained. "Meanwhile, inflation has made the cost of rebuilding each home more expensive."
Rising material costs hamper construction
Rising material costs are creating challenges for builders and contractors, according to a member survey released by the Associated Builders and Contractors on Monday.
The group's Construction Backlog Indicator fell to 8.5 in August. That's down from July, and it's a sign that rising costs are impacting builders, especially those with under $30 million in annual revenues.
"With private sector projects struggling under the weight of rising materials costs, policy uncertainty and reemerging labor shortages, that category may remain weak over the next few quarters," Anirban Basu, chief economist at ABC, said in a statement.
“About 1 in 4 contractors reported having a project delayed or canceled due to tariffs,” Basu added. “While contractor confidence was stable for the month, it will be interesting to see how long this optimism persists if the myriad headwinds facing the industry remain in place.”