Rising Insurance & Tax Costs Threaten Home Affordability | ReadySetLoan

Neil Caron
May 27
2 min read

May 27, 2025 | Market Trends, Real Estate | Presented by ReadySetLoan

Home prices and interest rates often take center stage when discussing housing affordability — but behind the scenes, another financial challenge is quietly inflating monthly mortgage payments: soaring property taxes and homeowners insurance.

At ReadySetLoan, we’re breaking down the lesser-known side of affordability pressures — and helping you prepare for them.

📊 The Real Cost of “Monthly” Homeownership

Over the last several years, the principal and interest (P&I) on a typical mortgage have surged. As of mid-2024, mortgage payments on a median-priced home were up 64% compared to the start of the pandemic. But for homeowners, the full monthly cost often includes more than just the mortgage itself — it includes property taxes and insurance, which can fluctuate and rise sharply over time.

These added expenses make up the "TI" in PITI (Principal, Interest, Taxes, Insurance), and they’re now becoming a bigger slice of the budget pie.

🐷 RSL PiggyPoints – What Buyers Need to Know

Insurance premiums have risen nearly 50% nationwide since 2019 — and have doubled in some high-risk regions.
In 2024 alone, insurance premiums jumped 14%, and are expected to rise another 10% in 2025 and 8% in 2026.
Property taxes have climbed approximately 27% nationally since 2019 — with increases as high as 50% in places like Colorado.
In some cases, taxes and insurance now exceed the monthly mortgage payment for principal and interest.

🎙️ Neil’s Take

“We’re seeing more first-time buyers surprised by how quickly escrow costs can shift — especially in areas prone to storms, fires, or fast-rising property values. Planning for these increases is key to staying comfortable in your home long-term.”

💡 Escrow Shortfalls Are On the Rise

Recent analysis from Cotality revealed that escrow shortages — often caused by tax and insurance spikes — are increasingly common:

Texas: 55% of mortgage escrow accounts experienced shortages
Florida: 40% of accounts short
California: 13% of accounts impacted

This trend is especially concerning for homeowners on fixed or limited incomes, who may not have the flexibility to absorb unexpected increases.

👓 RSL Perspective

At ReadySetLoan, we believe every homebuyer deserves the full picture. While a fixed-rate mortgage may keep your P&I steady, your T&I can still move the goalposts. Whether you’re budgeting for your first home or reassessing an existing one, it’s essential to build in a buffer for rising escrow costs.

Want help decoding the real cost of homeownership in your area? Connect with ReadySetLoan today to explore customized estimates and proactive strategies.

🏁 Your Next Step Starts Here

Understanding the full scope of your monthly costs helps you make smarter, safer decisions. If you're shopping for a home or already own one, let ReadySetLoan be your resource partner.

👉 Visit www.readysetloan.com to connect with an expert and run the numbers today.