According to data published in February 2026 by the National Association of Home Builders, more than 65% of households are unable to afford the median-priced new home in 39 states and the District of Columbia.
As the costs of owning a home increase, insurance is becoming a more significant part of the overall homeownership affordability puzzle. While insurance agents are typically not the first call in determining what home a client can afford or when the best time to buy is, they are often tapped to help buyers understand the full financial framework of homeownership.
Therefore, conversations about insurance coverage can quickly shift into broader topics about costs, risks, and the long-term financial outlook of ownership.
What affordability means
It is crucial to navigate these conversations with both skill and empathy. First, it's important to recognize that homeownership has long been ingrained in U.S. society and is widely regarded as an important part of the American way of life.
Consumers are deeply concerned that homes and homeownership are becoming increasingly unaffordable for the average person and, therefore, that the traditional American Dream lifestyle enjoyed by generations before them is becoming impossible to reach.
Before discussing costs, ground the discussion with a shared understanding of what affordability means. The most common definition comes from the U.S. Department of Housing and Urban Development (HUD), which defines it as a home in which the occupant pays no more than 30% of their gross income for housing costs, such as utilities, mortgage payments, and property taxes. Yet, according to a December 2025 report by Bankrate, U.S. workers who earn the median income will find themselves priced out of three in four homes on the market.
Why homeownership isn't affordable
There are several reasons why homeownership is not affordable today:
- Inflation and macroeconomic pressure are two driving factors that have been top of mind for many since prices spiked initially in the post-pandemic years. According to data from the U.S. Census and HUD, in Q1 of 2020, the median home price was $329,000, and in Q1 of 2025, it was $423,100, a 29% increase over five years. In recent months, inflation has elevated due to tariffs, the war in Iran, and other factors.
- Elevated mortgage interest rates have made it difficult both for first-time homebuyers and existing homeowners who want to move.
- Rising property taxes also affect affordability. To help offset rising costs, states and local municipalities will raise property taxes, making owning a home more expensive.
- Insurance premiums are increasing due to a rising frequency of extreme weather-related claims involving floods, hurricanes, tornadoes and hailstorms.
- Legal system abuse, such as unwarranted lawsuits, excessive jury awards, false and inflated claims, and third parties investing in legal actions, also inflates insurance costs.
What's driving monthly costs
Discuss with clients what expenses they are responsible for when it comes to owning a home, including:
- Mortgage payment, including the interest rate.
- Property taxes.
- Insurance premiums.
- Utilities.
- Maintenance and construction costs.
It's important to frame these costs as variables that can change over time, rather than just making a blanket statement that owning a home is "expensive," which can leave clients feeling frustrated and the discussion futile.
The dos: how to navigate affordability conversations with clients
Lead with empathy and shared values. Starting from a place of mutual understanding builds trust between you and your clients and keeps the conversation from feeling cold and transactional.
Ground the conversation in a shared definition of affordability. Before diving into the specifics of costs, establish a common framework for what constitutes an affordable home. The HUD benchmark of 30% of gross income helps put into perspective what affordable actually means.
Discuss the true cost of homeownership. Owning a home requires more than just paying a mortgage bill every month. It's important to frame the true cost of owning a home as comprising several components, such as mortgage and interest rates, property taxes, insurance premiums, utilities, and maintenance. Your client will respond better when they understand that insurance is just one piece of the larger financial picture when it comes to owning a home.
Connect costs and use concrete examples. While discussing insurance premium increases isn't always comfortable, it's a necessity. You'll want to reference what aligns with what your clients are already seeing in the news and their own communities, such as rising repair costs, more frequent severe weather events, and increased rebuilding expenses.
Clients are also more receptive to these conversations when agents use real-life examples to explain factors that may affect the cost of coverage. As an agent, you may want to reference natural disasters like hurricanes, severe winter storms, and wildfires, which have led to higher claim costs and, in turn, increased premiums.
The don'ts: what to avoid in affordability conversations
Don't downplay the impact of rising insurance premiums. Although insurance is just one financial factor of homeownership affordability, it's important not to minimize its impact. Homeowners insurance is one of the most visible for consumers, and those living in high-risk areas may face premium increases that affect affordability. Downplaying these costs can make agents seem out of touch. As their insurance agent, it's better to acknowledge the impact of insurance costs on households and help clients to better understand the factors that affect their policies. Independent insurance agents, in particular, are uniquely positioned to help consumers navigate these issues by offering them a choice in insurance carriers, coverage options specific to their needs and budgets, and local knowledge about what risks are more likely to affect their community. The combination of personalization, flexibility and community insight allows consumers to be more informed and confident about their insurance decisions.
Don't seek sympathy for the insurance industry. As an insurance agent, you may be well-versed in the affordability challenges around insurer losses, capital constraints, or market exits. However, it doesn't mean this messaging will translate well with clients.
Despite the recognition that inflation has increased costs for the sector, most clients perceive the industry as financially well-off. For this reason, they may be skeptical of this messaging and perceive it as agents trying to seek sympathy and justify increases simply to cover industry costs. Instead, center the conversation around external cost drivers like severe weather events, inflation and increases in repair costs that the client can relate to.
Don't rely on new technology as a replacement for human decision-making. In the last several years, there has been a surge in the adoption and reliance on AI technology and data across business sectors, including insurance. Agents should avoid overemphasizing the role of AI, predictive analytics, and data-driven technology in setting premiums or assessing risk, as some consumers may see these tools as impersonal, unreliable, or inequitable. This may be especially true if they believe the technology reduces transparency in the process or completely replaces human decision-making. Framing affordability issues too narrowly through algorithms and risk models can make these conversations feel disconnected from the real financial pressures consumers face today.
Instead, agents should take a more empathetic approach to these discussions, focusing on providing clear explanations and practical guidance. Remember, agents often serve as trusted advisors, and these conversations provide the opportunity to help people better understand their coverage options, navigate changes in the market, and make informed decisions based on their individual circumstances and localized needs.
Conversations centering on being able to afford a home in today's economic climate can be complex and personal. As their trusted advisors, insurance agents can help their clients navigate homeownership discussions with clarity and confidence. By starting with a shared definition of affordability, clearly explaining the factors and events that can cause premiums to rise, and approaching these conversations with empathy, agents can build greater trust and credibility with their clients. It is just as important to know what not to say as it is what to say.
As finances remain top of mind for U.S. families, thoughtful, well-informed discussions are essential for reinforcing strong client relationships and helping clients make confident decisions about protecting their homes.
