"For industry insiders, the challenge (and the opportunity) lies in understanding the layered, less visible forces shaping affordability for today's first-time homebuyers. The truth is that affordability isn't shaped only by where rates land or how quickly prices climb; it's increasingly a function of a borrower's balance sheet, monthly cash flow and income, which all factor into debt-to-income ratios (DTI) and ultimately getting approved for a loan."
"Homeowners' insurance is emerging as one of the most potent affordability headwinds. Premiums have surged nationwide amid escalating climate risk, catastrophe losses, and carrier pullback, with Florida and California as the most visible flashpoints. According to Realtor.com (July 8, 2025), average 2025 annual premiums are projected to rise $509 in Florida, $1,320 in California, and an astonishing $2,974 in Louisiana. Those jumps translate to hundreds of dollars added to monthly PITI calculations, enough to push many first-time buyers' DTI ratios past qualifying limits."
Affordability for first-time buyers increasingly depends on borrower balance sheets, monthly cash flow, income and resulting debt-to-income ratios rather than solely on mortgage rates and home prices. Homeowners' insurance premiums have surged due to climate risk, catastrophe losses and carrier pullback, with projected 2025 annual increases of $509 in Florida, $1,320 in California and $2,974 in Louisiana, raising monthly PITI and pushing DTIs higher. Automated underwriting systems have grown more restrictive, with creditworthy borrowers pushed into FHA loans and higher mortgage insurance costs. Those combined headwinds can push many buyers past qualifying limits and derail purchases.
Read at www.housingwire.com
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