When most people start planning to buy a home, they focus on two big numbers: the purchase price and the mortgage rate. Those are obviously important, but they’re not the only costs that determine what homeownership will actually look like month to month.
One expense that’s getting much more attention lately is homeowners insurance. Over the past several years, insurance premiums have increased across much of the country, leaving many buyers wondering how much they’ll actually need to budget beyond their mortgage payment.
The good news is that while insurance costs are still climbing in many areas, the pace of those increases appears to be slowing. That’s an encouraging sign for buyers who have been watching affordability closely.
Here’s what you should know before you start shopping for your next home.
Homeowners insurance has always been part of buying a home, but it has become a much larger part of the conversation in recent years.
According to research from the Pew Research Center, more than seven in ten homeowners say their insurance premiums have increased over the past few years. Depending on where you live, those increases have ranged from modest to significant.
For buyers, this means it’s more important than ever to think beyond the monthly mortgage payment. Your housing budget should include property taxes, homeowners insurance, HOA dues if applicable, utilities, and ongoing maintenance costs.
Looking at the full financial picture from the beginning can help you avoid surprises after closing and give you a much better understanding of what you can comfortably afford.
Many of the headlines focus on rising insurance premiums, and that part is true. Costs are still increasing in many markets.
What often gets left out of those stories is that the rate of increase is beginning to slow.
Recent data from Rate Insurance shows that 2025 marked the first slowdown in annual homeowners insurance premium increases since 2019.
While that doesn’t mean policies are suddenly becoming less expensive, it does suggest the rapid spikes we’ve seen over the last several years may be beginning to stabilize.
That’s welcome news for buyers who have been trying to navigate higher mortgage rates, rising living expenses, and increasing housing costs all at once.
One of the biggest factors affecting your insurance premium is location.
Insurance companies calculate rates based on risk, and that risk looks very different from one area to another. Regions that experience more hurricanes, flooding, wildfires, hail, or severe storms generally have higher premiums because insurance companies expect more claims.
Even within the same state, insurance costs can vary depending on the neighborhood, the age of the home, local building codes, and proximity to emergency services.
The home itself also plays a major role. Things like the age of the roof, plumbing, electrical system, construction materials, and whether the property has features like hurricane shutters or impact-resistant windows can all influence your premium.
Because of all these variables, two homes with similar prices may have very different insurance costs.
One mistake many buyers make is waiting until they’re under contract before looking into insurance.
Instead, consider getting an insurance quote before you submit an offer on a home.
Doing so gives you a much clearer picture of your expected monthly housing costs while you’re still making decisions.
If one property carries significantly higher insurance premiums than another, you’ll know before you’re committed. That information can influence your budget, your offer, or even which homes you decide to pursue.
Planning ahead also helps prevent unexpected expenses from showing up right before closing.
While you can’t control everything that affects insurance pricing, there are several ways you may be able to reduce your premium.
Compare multiple quotes. Every insurance company calculates risk differently, so prices can vary more than many buyers expect.
Bundle your policies. Many companies offer discounts when you combine your homeowners and auto insurance.
Ask about available discounts. You may qualify for savings based on your occupation, security system, claim history, or other factors.
Highlight recent home improvements. A newer roof, updated electrical system, impact windows, or storm-resistant features can often reduce premiums.
Maintain strong credit. In many states, insurers consider credit history when determining rates, so improving your credit score may lead to lower premiums.
None of these strategies guarantees the lowest possible rate, but together they can make a meaningful difference over the life of your policy.
Buying a home involves a lot of moving pieces, and homeowners insurance is just one of them.
A knowledgeable real estate agent can help you think through the total cost of ownership instead of focusing solely on the listing price. They can also connect you with trusted local insurance professionals who can provide quotes early in the process.
Having those conversations before you’re under contract allows you to make more informed decisions and shop with confidence.
The goal isn’t simply to find a home you love. It’s to find one that also fits comfortably within your financial plan.
Homeowners insurance has become a more important part of the homebuying conversation, but it doesn’t have to be a source of uncertainty.
By getting quotes early, understanding the factors that affect premiums, and building those costs into your budget from the beginning, you’ll be in a much stronger position when it’s time to make an offer.
Buying a home is one of the biggest financial decisions you’ll make. The more prepared you are before you start, the more confident you’ll feel throughout the entire process.