Hidden flood threats: 1 in 4 U.S. homes face severe climate risk, new report shows

Climate-driven hazards are reshaping the housing market, according to a new analysis released on Wednesday by Realtor.com.

The report found that more than one in four homes in the United States, representing about $12.7 trillion in real estate value, are exposed to severe or extreme risk from flooding, hurricanes, wildfires, and other climate-related threats.

“This is not a hypothetical problem. It is a clear and present danger,” said Joel Berner, a senior economist at Realtor.com. “More than one in four homes has a significant chance of damage from flooding, hurricanes, wildfire, or wind, and many homeowners do not even realize it.”

These hazards are driving up insurance premiums and complicating homebuying decisions nationwide, including in North Carolina.

Flood Risk Often Overlooked in the Triangle

While Raleigh and the surrounding region are not among the nation’s highest-risk markets, Berner said many Triangle homeowners underestimate the possibility of flooding.

Realtor.com’s data, which uses modeling from the nonprofit First Street Foundation, shows that a significant number of homes in the Raleigh metro area face flood risks not identified on FEMA’s official maps. That means buyers may be purchasing homes without realizing their true exposure.

“FEMA’s maps do not always reflect today’s reality,” Berner said. “We are seeing homes outside those designated flood zones experience major flooding. That is a big blind spot for buyers.”

Nationwide, nearly 6 million homes face severe or extreme flood risk over the next 30 years but are not listed in FEMA’s Special Flood Hazard Areas, the report found.

Rapid Growth Brings New Challenges

Jason Kogok, a Triangle real estate agent for 20 years and a professor at North Carolina State University’s Peter Pappas Real Estate Development Program, said the region’s fast-paced growth has increased stormwater challenges, which climate change is intensifying.

“We are not dealing with the same coastal hurricane or wildfire risks you see in other parts of the country,” Kogok said. “But our area has developed at a really fast pace, and as rains get heavier, that water has to go somewhere. That is the missing link a lot of people in Raleigh are not giving enough credit to.”

Kogok said the next generation of planners and developers is approaching climate risk differently, especially his graduate students at N.C. State.

“They fully understand climate change. There is no debate for them,” he said. “They are being creative with building design, materials and stormwater solutions. The challenge is connecting that innovation with developers and decision-makers who are still very focused on the bottom line.”

Kogok also warns buyers not to assume FEMA maps are a reliable guide.

“People think they’re either in a flood zone or they’re not, but it’s not that simple,” he said. “Those maps were based on historical patterns, but development has changed everything. Less grass, more pavement — when heavy rain comes, our stormwater systems can’t always keep up.”

Rising Insurance Costs Affect Affordability

The Realtor.com report also highlights how climate risk is affecting insurance markets nationwide. As extreme weather events become more common and unpredictable, many homeowners are facing higher premiums or policy non-renewals, even in areas previously considered low risk.

“Even if you have not experienced a hurricane, wildfire or flood, you are likely already paying more in your insurance premiums because of overall uncertainty,” Berner said.

In North Carolina, the effects of Hurricane Helene last year accelerated insurance rate hikes. Some residents are struggling to find affordable coverage, and others have been given non-renewal notices by their insurers.

“I haven’t had deals fall through because of flood zones, but I have seen roadblocks because of insurance coverage,” Kogok said. “Some companies are excluding older roofs or other key items, even when a home is in good shape. To keep premiums reasonable, a lot of homeowners are saying yes to those exclusions, and I think they are underestimating their future risk.”

The report highlights how insurance deductibles are climbing nationwide. For homes in hurricane-prone regions, many standard HO-3 policies now require homeowners to pay 5% of their dwelling coverage before insurance kicks in. For a $400,000 home, that could mean a $20,000 out-of-pocket cost — 20 times higher than a typical deductible.

What Homebuyers Should Do

Kogok advises Triangle homebuyers to take a proactive approach when evaluating properties:

• Inspect crawl spaces and foundations for signs of moisture or flooding
• Review multiple sources of risk data, including FEMA maps and independent tools like First Street’s Flood Factor or Realtor.com listings
• Talk to neighbors about drainage and runoff patterns.
• Consult an insurance agent to understand potential gaps in coverage.

“You have to look beyond the listing,” Kogok said. “Talk to your insurance broker, crawl under the house, and ask the right questions. The cost of underestimating climate risk can be huge.”

A Growing Issue for North Carolina

Experts say climate-related costs will continue to influence affordability and housing decisions in North Carolina as the state faces heavier rain events, stronger storms and increasing development pressure.

“Climate change is already impacting your premiums, your ability to get coverage and, ultimately, the value of your home,” Berner said. “Homebuyers need more information and better tools to prepare for what lies ahead.”