In 2024, almost 45% of homes in the United States will confront at least one type of severe or extreme climate risk, such as flood, wind, wildfire, heat, or air quality.
With natural disasters like these on the rise across the U.S., climate resilience is becoming an important factor worth considering before buying a home.
And we can tell you where to house hunt for a safer bet: America’s heartland.
In the latest Wall Street Journal/Realtor.com® Housing Market Ranking, 12 of the top 20 housing markets are in the Midwest.
The area tends to be less affected by climate risks, which can give buyers more peace of mind when purchasing a home.
The two Midwest cities that top the climate-resilient housing markets—Akron, OH, and Appleton, WI—both saw just 1.8% of properties at risk of damage from one of the aforementioned climate risks over the next 30 years.
Fort Wayne, IN, which ranked No. 1 among the top housing markets, has only 2.3% of properties at severe or extreme risk.
The climate score captures the share of properties in a given metro that are affected by severe or extreme exposure to any combination of five climate risks—extreme heat, wind, air quality, flood, and wildfire—over the next 30 years.
The impact of extreme weather events
“Climate risk is a big deal,” says Realtor.com economist Jiayi Xu.
“It can impact home values, insurance costs, and the overall stability of a housing market.”
Yet some buyers are more worried about climate risks than others.
“In the real estate market, you find three buyer categories: buyers who believe climate change is happening and factor that into their purchase decisions, buyers who think it is a hoax and do not consider it a factor, and those who don’t care either way and do not factor climate issues into their decisions,” says real estate professional and attorney Bruce Ailion, of Re/Max Town & Country in Atlanta.
However, the numbers are hard to deny.
In 2023, the United States experienced 28 separate weather or climate disasters that each resulted in at least $1 billion in damages, according to the National Oceanic and Atmospheric Administration.
In fact, more than 3 million Americans have moved because of the growing risks of flooding, First Street has found.
Financial pitfalls of not considering climate risk
If your home is damaged by a natural disaster, you might face significant repair costs for both the property and your home’s contents—and your insurance premiums could go through the roof.
“In severe cases, insurers might withdraw coverage altogether,” warns Lukky Ahmed, CEO and co-founder of Climate X, a leader in global climate risk data analytics.
Indeed, hurricane hot spots like Florida are facing an insurance cost crisis.
“Insurance is a huge consideration in buying in Florida—especially now with the insane rate increase of up to 40% year over year in 2023 alone,” says Nicole Brown, a real estate adviser in Pensacola, FL.
“There is also a large part of the escrow process that is heavily focused on insurability of a property.”
Ahmed says climate risks could eventually lead to properties becoming unmortgageable, leaving homeowners with stranded assets that cannot be sold.
“It is more cost-effective to assess climate risks and take protective actions now rather than waiting until it’s too late,” Ahmed advises.
How to determine your home’s potential climate risk
Realtor.com recently introduced climate data provided by First Street to our real estate ranking parameters, factoring in the share of properties that will likely be affected by climate risks over the next 30 years.
This includes severe or extreme exposure to any combination of extreme heat, wind, air quality, flood, and wildfire.
In addition, climate risks are now listed in the Environmental Risk section when looking at an individual property on Realtor.com.
“Homebuyers should definitely consider climate risk before purchasing a home,” says Ahmed.
“Ignoring predictive data won’t change the reality that physical climate risks are already impacting property prices and living conditions worldwide.”
“I’ve had clients who would have closed on a purchase, but climate changed their minds,” adds Saddat Abid, senior property buyer and CEO at Property Saviour.
“An example is a family that first desperately wanted to buy an exquisite waterfront property, but decided against it because of the growing issues surrounding sea-level rise and the increase in hurricanes.”
Top Midwest markets
Buying in the Midwest, where the climate risks are lower, can save you big bucks down the road, according to Ahmed.
Here are the 12 Midwest markets in the top 20 that tend to have lower climate risks, plus their median list price as of June 2024.
Fort Wayne, IN
Median home list price: $335,000
Climate score: 2.3%
Canton, OH
Median home list price: $255,000
Climate score: 2.7%
Akron, OH
Median home list price: $265,000
Climate score: 1.8%
South Bend, IN
Median home list price: $320,000
Climate score: 5.4%
Rockford, IL
Median home list price: $220,000
Climate score: 4.2%
Ann Arbor, MI
Median home list price: $545,000
Climate score: 2.7%
Appleton, WI
Median home list price: $425,000
Climate score: 1.8%
Columbus, OH
Median home list price: $400,000
Climate score: 2.5%
Toledo, OH
Median home list price: $275,000
Climate score: 2.0%
Kalamazoo, MI
Median home list price: $375,000
Climate score: 3.6%
Springfield, MO
Median home list price: $345,000
Climate score: 2.9%
Dayton, OH
Median home list price: $260,000
Climate score: 3.1%
