Homes in Climate-Risk Areas Expected to Drop in Value

Residential real estate plays a major role in the U.S. economy, with a total value of $50 trillion. But that figure is likely to shrink as climate change continues to affect property values, according to a recent report from climate-risk data provider First Street. Historically, areas that offered both affordability and a high quality of life saw the fastest population growth. For instance, the long-standing trend of migration to the Sun Belt is being disrupted by climate change, with Texas, Florida, and California—its three largest states—accounting for over 40% of the nation’s $2.8 trillion in natural disaster costs since 1980. By 2055, climate risks could negatively impact property values in 84% of all U.S. neighborhoods, leading to an estimated $1.47 trillion in losses.

Ultimately, environmental stressors and associated rising homeownership costs are together reshaping home values. With residential real estate representing one of the largest economic sectors in the country, these shifts will result in serious impacts that ripple through communities. Understanding these dynamics is crucial as public and private stakeholders navigate an increasingly complex landscape where housing decisions must balance traditional location value drivers with new climate realities. Read more