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Homeowners insurance cost burden by state, as told by one map

On Wednesday, Freddie Mac published updated home insurance data for all 50 states.

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“We find that the effective HO [homeowners] insurance rates were the highest in the central U.S., leading to notable cost burdens in several states within this region. Among all income groups, lower-income borrowers were more challenged,” wrote Freddie Mac economists.

Freddie Mac economists added that: “While the costs of HO [homeowners] insurance remain a small fraction of housing expenses, it’s a trend that we will continue to track going forward.”

Click here to view an interactive version of the map below

Among U.S. states, these 5 states had the lowest "homeowners' insurance cost burden," indicating the proportion of mortgage borrowers' monthly income dedicated to home insurance premiums in 2023.

  • Oregon: 0.90%

  • Utah: 0.90%

  • California: 1.00%

  • New Hampshire: 1.00%

  • New Jersey: 1.00%

These 5 states had the highest "homeowners’ insurance cost burden.”

  • Louisiana: 3.30%

  • Oklahoma: 3.00%

  • Kansas: 2.60%

  • Mississippi: 2.60%

  • Nebraska: 2.60%

Last week, the National Association of REALTORS (NAR) reached an agreed settlement in the commission lawsuit. The proposed settlement, which is still subject to court approval, involves a payment of $418 million in damages and amendments to several rules. According to NAR, as part of the agreement, “NAR has agreed to put in place a new MLS rule prohibiting offers of broker compensation on the MLS.”

To better understand how this could impact the residential real estate industry heading forward, ResiClub plans to run a series of opinions from executives across the industry. (Sharing the commentary doesn't mean ResiClub endorses the commentary).

First up: John Liss, CEO of True Footage, a Series B valuation technology company. The company just launched GlassHouse, a sales enablement platform for listing agents to sell properties quicker and for maximum value.

Here’s what Liss told ResiClub 👇

In my 2016 undergraduate thesis studying the residential brokerage industry in Manhattan, I found that agents would push buyers to listings that had higher commission payments. This incentive was recognized by developers in NYC and then used as a tactic to sell inventory at record prices. During the 2012-2015 new condo boom, some NY real estate developers were paying out up to 5%, just to buyers’ agents. Changes to the brokerage structure were an inevitability once the DOJ started sniffing around. The NAR settlement is an exciting opportunity for top residential agents to eat more market share. Our best guess is that sell-side commissions will settle at 2.5%, and buyside agents will collect from buyers if a buyer elects to use representation. Buyer agents will try to sign exclusives with buyers with pre-set agreements on fees before searching. Many more transactions will occur with one broker, but it’s too early to determine the exact percentage. Much of that will hinge on how buyside commissions get wrapped into financing. New technology platforms will emerge to help make buyers more confident in transacting. Listing agents that sell properties faster and with a better customer experience will consolidate volume. This is an Uber or Airbnb-type moment for this industry, and someone is going to build a generational company where it will seem obvious 10 years from now that this was always the better way to buy and sell real estate,” Liss tells ResiClub.

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