How Can I Lower My Climate Risk When Buying a House?

New York Times

24-02-2025

A question we get from readers more and more is some version of this: How should the growing risks from climate change affect my decision to buy a house? Or, if I buy a house, where should I buy, and what should I keep in mind?
It seems especially urgent now, as insurance costs in some parts of the country have far outstripped the rate of inflation. Here's some advice from experts.
What are the concerns?
When thinking through your home-buying decision, it's useful to think in terms of two categories of risk, according to Jesse Keenan, a professor at Tulane University who studies the effects of climate change on real estate.
The first is what could be called climate shocks. As humans burn more fossil fuels, causing global temperatures to increase, extreme weather events like hurricanes, floods and wildfires are becoming more frequent and intense. That means the risk of your house being damaged or destroyed by a disaster is growing over time.
The second category is climate stresses, Dr. Keenan said. More frequent and severe disasters are forcing local governments to spend more on infrastructure — like sea walls, storm pumps, and hardening critical facilities — services that are funded largely through property taxes. 'Taxes are only going up with climate change,' he said.
Climate stress also affects the cost of home insurance. The amount of money that households paid for insurance rose faster than inflation between 2014 and 2023, according to data compiled by Benjamin Keys, a professor of real estate at the University of Pennsylvania's Wharton School, and Philip Mulder, a professor at the University of Wisconsin School of Business.
And don't forget the potential effect of climate change on your home's long-term value. Properties in areas at greater risk from climate change 'are also at risk of seeing a thinner pool of buyers,' said Sam Chandan, founding director of the Chen Institute for Global Real Estate at New York University's Stern School of Business.
Can I buy somewhere 'safe'?
There was a period not long ago when people talked about 'climate havens,' places where some mix of geography, topography and weather patterns meant the risk of climate shocks would be, if not zero, then close to it. As a reporter, I sometimes heard people in Miami say that if the seas rose, they would move someplace safe, like Asheville, N.C.
Then Hurricane Helene came for Asheville, emphasizing in the most painful way that no place is immune.
But that doesn't mean all properties are equally exposed. Rather than think in binary terms like risky or safe, prospective home buyers should get comfortable with idea of degrees, Dr. Keys said.
And exposure to climate risk isn't the only thing to consider. Some cities and towns do a better job of protecting against climate threats, Dr. Chandan said. That can take the form of tougher building standards, which can reduce damage from wildfires or flooding.
Does that mean a house is a bad idea now?
Not necessarily. Experts stress that homeownership remains, in general, a good way to build wealth.
The point is, you should ask questions.
Start by assessing the amount of risk facing the property you're considering, according to Sheila Foster, a professor at Columbia University's Climate School. One important thing to do is check whether the property is in a federally designated flood zone.
But being outside a flood zone doesn't mean your risk is zero. You should also consider your home's exposure to heat. Neighborhoods with plenty of trees and green space will give you more options during a heat wave, keeping your home cooler in general, and especially if your power fails.
If you're looking at buying a condo, ask about the building, Ms. Foster added. Does it use efficient forms of heating? Does it meet recognized standards, like LEED certification?
In some places, think twice.
Buying a home was never a financial slam-dunk, even before climate change became a growing concern.
Any number of things could cause the value of your home to fall: Changes to the neighborhood, or a burst of new home construction nearby. Climate change just adds to the uncertainty.
But in some cases, that additional risk may be too much.
Dr. Keenan said that in high-risk areas like coastal Florida, he would rent rather than buy. Take the money you would have spent on insurance, maintenance and other costs, and put it into the stock market, he said. 'Your rate of return is going to be greater.'
If you're looking at a place facing an existential risk from sea-level rise, like the Florida Keys or the Outer Banks of North Carolina, 'you need to go in really cleareyed,' Dr. Keys said. 'These assets are not there for the long haul.'
As for other places, Dr. Keys offered this rule of thumb: Find out how much insurance costs now. Then, consider whether you could still afford your monthly costs if those insurance premiums doubled or tripled.
If the answer is no, then maybe don't buy the house.