Texas insurance costs remain elevated even as home prices soften and inventory expands across the state. Texas Department of Insurance data and mid-2026 housing figures show why lower asking prices alone may not resolve Housing Affordability pressures for buyers and existing homeowners managing the full cost of ownership.
Key Takeaways
- Texas homeowners paid an average annual premium of $3,506 in 2025, based on preliminary state data.
- The average statewide homeowners insurance rate change slowed to 4.3 percent in 2025 after increases of 21.1 percent in 2023 and 18.7 percent in 2024.
- Texas recorded a statewide median home sales price of $340,000 in May 2026.
- The median Texas home price during the first half of 2026 remained 31 percent higher than six years earlier.
Insurance costs have become a more visible part of the housing affordability equation in Texas as households face a combination of home prices, mortgage payments, property taxes and recurring insurance expenses.
The shift is occurring even as the residential market gives buyers more negotiating room. Texas homes spent an average of 64 days on the market in May, while inventory reached 5.3 months of supply and the statewide median sales price remained largely unchanged from a year earlier.
Those conditions suggest a housing market that has become less competitive for buyers in some areas. They do not necessarily mean that homeownership has returned to earlier affordability levels.
Insurance Costs Have Reset the Monthly Housing Equation
Texas Department of Insurance figures show the preliminary average annual homeowners premium reached $3,506 in 2025. That compares with $3,291 in 2024, $2,124 in 2021 and $1,987 in 2020.
The difference amounts to an increase of roughly 65 percent between 2021 and 2025.
Insurance rate increases were particularly pronounced in the years leading up to 2025. Statewide average homeowners rate changes reached 10.8 percent in 2022, 21.1 percent in 2023 and 18.7 percent in 2024 before slowing to 4.3 percent in 2025, according to state rate-filing data.
The distinction between rates and premiums is important. A rate reflects the price charged for a unit of insurance exposure, while the premium is the amount a policyholder ultimately pays. Changes in property values, coverage amounts and property-specific factors can affect the final premium even when the pace of statewide rate increases slows.
The state reported a negative 2.8 percent average filed rate request for July 2026 and a positive 0.4 percent average for May through July. Those figures indicate that recent filing activity has moderated, although average annual premiums remain well above levels recorded earlier in the decade.
Softer Home Prices Have Not Erased Affordability Pressure
The Texas housing market is offering buyers conditions that differ considerably from the rapid price-growth period earlier in the decade.
The statewide median sales price reached $340,000 in May 2026, compared with $335,000 in April, while remaining largely unchanged from the prior year. Median seller price cuts reached $12,000, and homes took an average of 64 days to sell.
Those figures provide additional context for the broader Texas housing market, where buyers in some areas have more time and inventory to consider than they did during periods of unusually tight supply.
Price moderation, however, is occurring from a higher starting point. The Texas Real Estate Research Center reported in July that the median home price in the first half of 2026 remained 31 percent above its level six years earlier. Even Austin, where prices declined more sharply after a rapid earlier increase, remained 25 percent above spring 2020 levels.
The result is a more complicated Housing Affordability picture. More listings and greater seller flexibility can reduce some pressure at the point of purchase, but buyers still have to account for financing, insurance, taxes and other recurring expenses.
Broader housing affordability pressures have also become part of discussions around the cost of living in major Texas metropolitan areas.
The Full Cost of Ownership Is Reshaping Housing Affordability
Insurance matters because most mortgage lenders require homeowners coverage, making it a recurring component of the ownership budget rather than an optional household expense. Fannie Mae notes that most lenders require homeowners insurance for properties with a mortgage and that the payment may be collected alongside the monthly mortgage payment.
The amount a household pays can vary significantly from one property to another. Texas regulators identify location, the age and material of a roof, replacement cost, claims history, credit information and the age of the home among factors insurers may consider when determining premiums.
That means two similarly priced homes may carry different ongoing insurance expenses.
For current homeowners, the issue can arise even without a purchase. A household with an older fixed-rate mortgage can still experience higher annual housing expenses if its homeowners premium rises at renewal.
For prospective buyers, this makes the total monthly estimate increasingly important. A lower sale price can reduce the mortgage balance, but it does not automatically offset higher insurance, taxes and other property-related expenses.
Texas housing affordability therefore depends on more than the direction of home prices. With insurance costs remaining elevated compared with the beginning of the decade, the full recurring cost of ownership continues to influence what households can reasonably carry each month.
Frequently Asked Questions
How much was the average Texas homeowners premium in 2025?
The preliminary statewide average annual homeowners premium was $3,506 in 2025, according to the Texas Department of Insurance. The average was $3,291 in 2024 and $2,124 in 2021.
Are Texas homeowners insurance rates still rising as quickly?
The pace slowed in 2025. The average statewide homeowners rate change was 4.3 percent, compared with 18.7 percent in 2024 and 21.1 percent in 2023.
Are Texas home prices falling enough to improve affordability?
Some markets have experienced price softening, but statewide prices remain well above 2020 levels. The median Texas home price in the first half of 2026 was still 31 percent higher than six years earlier.
How do insurance costs affect housing affordability?
Insurance costs add to the recurring expenses households must consider alongside mortgage payments and property taxes. Because most lenders require homeowners insurance on mortgaged properties, higher premiums can increase the total monthly cost of owning a home.
