ICE Mortgage Monitor: Property Insurance Costs Rose at a Record Rate in 2024
- Ernesto Perez
- Mar 11
- 4 min read
Here is the ICE March Mortgage Monitor report (pdf).
The average annual property insurance premium among mortgaged single-family homes rose by a record +$276 (+14%) to $2,290 in 2024, capping a five-year rise of +$872 (+61%)
Seattle (+22%), Salt Lake City (+22%) and Los Angeles (+20%) saw the largest percentage increases in 2024, while the largest increases by dollar amount were in Dallas (+$606) and Houston ($515)
Property insurance premiums in Florida increased by less than half the national average on a percentage basis, but rates there remain among the highest in the country.
A record 11.4% of borrowers switched carriers in 2024, up 2 percentage points from 2023, likely due to a combination of rising nonrenewal activity and borrowers shopping for lower premiums.
Homeowners are opting for higher deductibles in exchange for premium savings, with new borrowers having 19% ($390) higher deductibles and 12% ($284) lower premiums than the market at large
“While it’s no surprise that insurance costs are rising, we’re beginning to see emerging trends in terms of how homeowners are responding to the higher cost environment,” said Andy Walden, Head of Mortgage and Housing Market Research for Intercontinental Exchange. “We’re seeing increases in both the share of borrowers switching policies and borrowers taking on higher deductibles as a way to combat rising premiums.”
emphasis added
Property Insurance Premiums Increased Sharply in 2024
Here is a chart from the Mortgage Monitor. These increases are largely being driven by losses due to natural disasters.
The average annual property insurance premium among mortgaged single-family homes rose by a record $276 (+14%) to $2,290 in 2024.
That’s the largest single-year increase on record dating back to 2013 when ICE began tracking the metric, and when stacked on top of the $245 (14%) increase seen in 2023 caps off a 61% ($872) increase over the past 5 years.
Property insurance costs continue to be the fastest-growing subcomponent of monthly home payments compared with principal, interest, and property taxes.
The average total mortgage payment (PITI) rose 6% last year, with the 14% rise in property insurance costs significantly outpacing an 8% rise in interest payments and the 5% rise in property taxes among all outstanding mortgages.
While all other subcomponents rose, the amount of principal paid on the average mortgage held flat from 2023.
Over the past 5 years we’ve seen 21-22% increases in principal, interest, and tax payments among the active mortgage population, roughly a third the rise in property insurance.
Mortgage Delinquencies Decreased in January
Here is a graph of the national delinquency rate from ICE. Overall delinquencies decreased in January are below the pre-pandemic levels. Source: ICE McDash.
Delinquencies fell 24 basis points (bps) to 3.47% in January; that’s 10 bps higher than last year, but 33 bps below pre pandemic levels.
While hurricane delinquencies are on the mend – falling from 58K in November to 40K through January – wildfire-related delinquencies are beginning to emerge in California, with an estimated 680 borrowers missing their January payment.
All in, 490K previously delinquent borrowers cured to current in January, the highest such volume in a year.
Delinquencies for all stages improved, although a portion of the decline in borrowers 90 or more days late is due to increased foreclosure referrals following the expiration of a VA foreclosure moratorium.
Foreclosure Sales Remain Low
Foreclosure sales remain well below pre-pandemic levels; however foreclosure starts have picked up following the end of the VA foreclosure moratorium.
Foreclosure starts jumped by 30%, sales rose by 25%, and the number of active foreclosures rose by 7% in January following expiration of a recent moratorium on VA foreclosures.
While January increases in foreclosure activity are common, starts hit their highest level in 5 years, with more than 40K loans referred to foreclosure in the month.
Compared the same time last year, foreclosure starts among FHA (-2%) and conventional (-4%) loans declined, with the annual increase being solely driven by the spike in VA referrals.
Resumption of VA foreclosures – all else the same – could result in a roughly 15% increase in 2025 foreclosure referral activity compared to 2024.
January foreclosure sales rose from December following holiday moratoriums, but were down from the same time last year (-5%) even with the resumption of VA foreclosure sales.
House Price Growth Continues to Slow.
Here is the year-over-year in house prices according to the ICE Home Price Index (HPI). The ICE HPI is a repeat sales index. ICE reports the median price change of the repeat sales. The index was up 3.0% year-over-year in January, down from 3.4% YoY in December.
As expected, annual home price growth saw a noticeable pullback in January, falling to +3.0% from +3.4% the month prior, following three consecutive increases to close out 2024.
The temporary rise in late 2024 was driven by a weak Q4 2023 rolling out of the backward-looking window (along with a modest bump from rates falling to near 6% in early Q4) which had an upward pull on year-over-year gains.
We’ll be facing the opposite in coming months, with what was a strong early 2024 start now slowly exiting the backward-looking window.
Approaching Q2, annual gains will begin to more accurately reflect more recent trends, with an average seasonally adjusted annualized rate (SAAR) over the past 9 months of around +2.0%, and prices rising by a seasonally adjusted +0.12% (+1.4% annualized) in January, the softest such growth rate in 5 months.
Inventories levels, which have improved in nearly every major market over the past 12 months ‒ with the national deficit falling from -40% a year ago to -25% today ‒ should provide more options for prospective homebuyers as we head into the spring buying season, and help take some pressure off prices, barring a significant drop in 30-year rates.
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