Rising homeowners insurance costs prevent nearly two-thirds of Texas households from being able to afford homeownership, according to new data from the Kinder Institute for Urban Research at Rice University and public policy organization Texas 2036.

Approximately 64% of households in the state are cost-prohibited from owning a median-priced home — that equates to about 7 million families, researchers said.

“Homeowners insurance has become an increasingly important part of the housing affordability conversation because median insurance costs have increased at a higher rate than home purchase prices,” said Steve Sherman, associate director of research at Kinder Institute’s Center for Housing and Neighborhoods.

Between 2009 and 2024, insurance premiums skyrocketed 74% while the median household income rose just 11%. Furthermore, premiums have increased 30% over the past five years alone compared to 3% income growth.

“Texas is a huge state with very different housing markets and climates that can affect insurance prices, but one thing remains consistent across the state,” Sheman said. “Homeowners insurance costs have become a growing affordability challenge nearly everywhere.”

Furthermore, an additional 10% increase in homeowners insurance costs would prohibit another 50,000 Texas households from being able to afford a median-priced home.

“Premiums are now a large enough share of housing costs that a single year’s increase can price tens of thousands of households out of buying a home,” said Tracy Ayrhart, vice president of data and research at Texas 2036. “What we still can’t see is how households are absorbing it. That’s the question worth taking up next.”

Researchers also found that Black and Hispanic households are disproportionately likely to be affected by rising insurance costs in comparison to white and Asian households. And while metropolitan city centers are seeing the steepest increases, rural areas are also feeling the burden of rising insurance costs.

“Without some kind of policy change or market disruption, homeowners should hope for the best but prepare for the worst by factoring rising insurance costs into their long-term housing budgets,” Sherman added.