The insurance market at halftime: What builders need to know for the rest of 2026

The spring housing market came in with genuine momentum. Mortgage rates had moderated. Affordability was improving at the margins. Pent-up buyer demand was real. And running beneath all of it, quietly reshaping what buyers could actually afford, was the continued rise of homeowners insurance costs.

A Pew Research Center survey conducted in March 2026 found that 71% of U.S. homeowners say their insurance costs have gone up in recent years, and 42% say it has gone up a lot. Homeowners paid an average of 24% more for insurance in 2024 than in 2021, and premiums increased in 95% of U.S. ZIP codes. Builders operating in any market are feeling the effect of buyer hesitation, budget recalculations and closing friction. The question heading into the second half of 2026 is not whether insurance is a factor in the sales process. It is how well prepared builders are to address it.

Some signals of stabilization

There is good news in the mid-year picture. AM Best’s 2026 Market Segment Outlook Report projected stabilization across the U.S. homeowners insurance segment, citing moderating premium growth, enhanced catastrophe risk management and improving reinsurance market conditions. A quiet Atlantic hurricane season in 2025 helped. Regulatory reforms in Florida are producing concrete results: The state’s insurer of last resort, Citizens Property Insurance, received approval for an average rate decrease of 8.7%, a reversal that would have been unthinkable two years ago.

For builders, broader carrier participation means more competitive options for buyers. New construction in particular carries distinct underwriting advantages over older homes. Tighter building codes, modern materials and lower claims histories all make newly built homes more attractive to carriers. Westwood is built specifically to surface those advantages, finding the most competitive, appropriate coverage for each buyer in each market, including markets where carriers have scaled back.

Where the market is still hitting hard

Florida and California remain some of the most impacted markets, but the story has shifted inland. According to the Insurance Information Institute, severe convective storms — tornadoes, hail, high winds — caused more than $51 billion in U.S. insured losses in 2025, the third consecutive year above $50 billion and more than any other category of natural disaster. States across the Midwest and Southeast that were once considered low risk are now seeing meaningful premium increases. Builders selling in those regions are encountering buyers who arrive already worried about what insurance will cost them.

Research from Florida State University found that a 10% rise in homeowners insurance premiums is associated with a 4.6% decline in housing prices in the affected area. For builders, that is a meaningful data point, but it is also an opportunity. New construction homes are consistently better positioned on insurance costs than comparable existing homes, which means builders who make insurance part of the conversation early can turn a market headwind into a genuine point of differentiation.

What to watch in the second half

The stabilization signals are real, but several pressures remain. The expense of imported building materials is pushing construction and repair costs higher. Because replacement value drives premiums, rising rebuild costs translate directly into upward pressure on rates that will continue to affect what homeowners pay for homeowners insurance coverage.

Westwood stays with buyers after closing, offering annual coverage reviews, re-shopping policies when better options exist and stepping in when a carrier issues a non-renewal. That continuity protects the buyer and reflects positively on the builder who put them in the right hands from the start.

What it means for builders going into the back half

The builders who navigate the second half of 2026 most effectively will not be the ones who avoid the insurance conversation. They will be the ones who own it, bringing coverage into the sales process early, giving buyers clarity on their full monthly payment from day one and working with an insurance expert who has the market access to deliver real options in any market.

Westwood Insurance Agency was founded by a home builder, and for more than 70 years, the agency has worked alongside builders, with a deep understanding of the sales process, the closing timeline and what is at stake when a deal stalls.

Today, Westwood provides insurance quotes for more than 75% of newly constructed homes across the U.S., working with a network of more than 50 carriers to give buyers access to broad, competitively priced coverage. When insurance enters the conversation at contract signing rather than at the closing table, buyers understand their full monthly payment from day one, and nothing is left to chance at the closing table.