Where Americans can't get mortgages in the US now

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Months after wildfires in California displaced thousands of residents and spurred a massive housing crisis in Los Angeles County, the ongoing impact points to a larger — and unquestionably disturbing — trend.
As extreme weather events increase in both frequency and severity, a growing number of insurers are pulling out of disaster-prone regions. That could make homeownership even less attainable in the future.
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Federal Reserve Chair Jerome Powell recently testified before the Senate Banking Committee and was asked about the availability of mortgages in states like California.
His response?
'Those banks and insurance companies are pulling out of areas, coastal areas and … areas where there are a lot of fires,' Powell told the committee. 'So what that's going to mean is if you fast-forward 10 or 15 years, there are going to be regions of the country where you can't get a mortgage.'
Climate change-driven foreclosures are estimated to cost insurers $1.21 billion in losses for 2025, according to a report from First Street. This is no surprise, as the National Oceanic and Atmospheric Administration predicts a 60% chance of an above-average hurricane season this year — with three to five major hurricanes forecasted.
This is in addition to the challenges caused by the wildfires in California at the start of the year — estimated to have cost insurers and reinsurers $50 billion in collective losses.
But with more insurance companies pulling out of disaster-prone states, homeowners' options for coverage are whittling down.
It's common practice for mortgage lenders to require borrowers to have homeowners' insurance in place before giving out loans. But the requirement to carry homeowners insurance doesn't end there.
You're typically required to maintain homeowners' insurance while you're in the process of paying off your mortgage. If your insurance is canceled, your mortgage lender will typically be notified. If you don't then find replacement insurance, your lender could compel you to use insurance it procures for you, known as force-placed insurance.
Between 2021 and 2024, average homeowners' insurance premiums increased by 24%, according to the Consumer Federation of America.
The cost to insure homes in disaster-prone states has also risen at a significantly faster rate than the national average. Between 2018 and 2022, consumers living in the top 20% of the at-risk zip codes paid $2,321 in average annual premiums, according to a Treasury Department report. This is 82% higher than those residing in the 20% of lowest risk zip codes.
In high-risk areas like Utah, premiums surged by roughly 59% over the last three years, while several insurers like Allstate and State Farm have pulled out of Florida and California.
Insuring your home shouldn't cost an arm and a leg.
You can compare offers from leading home insurance providers near you for free through OfficialHomeInsurance.com. Simply enter some basic information about yourself and the type of home you own, and OfficialHomeInsurance will browse through their database of over 200 insurers and display the lowest quotes in just two minutes.
By comparing your options and selecting the best rate available, you could save an average of $482 per year on premiums.
On this easy-to-use platform, you can read reviews of various insurance providers, and once you select the one you like, set up a free introductory call with your preferred provider, with no obligation to hire.
Read more: This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchases.
When your homeowners insurance is cancelled, it's important to find out why. If it's due to a specific issue with your home, there may be steps you can take to remedy it. But if it's part of a broad pullback at the county or state level, your options may be more limited.
You could, of course, shop for replacement insurance. But you may not have many affordable options.
In that situation, your best bet may be a FAIR plan. Short for Fair Access to Insurance Requirements, FAIR programs are state-run and provide insurance coverage for homeowners who can't get it the conventional way, due to living in a high-risk area.
The problem, though, is that FAIR plans can be pretty basic, offering only coverage for dwelling and personal property. This means you may not be able to get loss of use or liability coverage.
Worse yet, FAIR plans commonly only insure homes at their cash value, as opposed to their replacement cost value — meaning, the amount of money it would take to rebuild. Such is the situation a number of Los Angeles wildfire victims are in now, where they're entitled to some payout from their insurance, but not enough to rebuild the properties they've lost.
That's why it's important to research insurance coverage options before buying a home. And if you find that your options are limited, consider it a red flag.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.