The peril premium

There’s a new formula defining home affordability, and it’s inflating the price of stability. For 180,000 single-family homes in the U.S., the cost of homeownership is facing a triple-threat. Cotality identified these single-family homes as the ones at extreme property risk from three natural hazards at the same time, or in sequence.

For these properties, affordability is no longer measured by mortgage payments alone. Homeownership now requires a property risk management calculation. Natural hazard-related insurance coverage, repair costs, and physical safety increasingly determine whether someone can afford the monthly housing costs.

Where are there the most at-risk homes for natural disasters?

• New Orleans, Louisiana: 29,317 extreme-risk homes. The Big Easy has one of the highest concentrations of homes at risk for three natural disasters simultaneously. A total of 6.8% of the metro’s home face risk from hurricane wind, inland flooding, and hurricane flood.

• Houston, Texas: 23,602 extreme-risk homes. As one of Texas’ largest cities, homes at extreme risk of inland flooding, hurricane wind risk, and fire following earthquake are only a sliver of the total homes. That number expands quickly though when looking at homes in the area with any level of risk to these three threats.

• Baton Rouge, Louisiana: 14,984 extreme-risk homes. Inland flooding and hurricane wind risk sit alongside fire following earthquake exposure in this metro.