What is happening in the housing market?
Based on the data by ATTOM, released recently, there are various states that are in a state of concern when it comes to the housing market.
California, Illinois, New Jersey, and Delaware have the biggest most-at-risk markets in the country, which means that the prices and values of home are most likely to decline in the upcoming years.
The market has been rising in the pandemic and over the last decade in general. This has inflated some of the housing prices and when it is projected to cool off, as ATTOM shows, this can leave major bubbles and mortgage issues for homeowners.
How does the housing market affect my homeowners’ insurance?
The decreasing market has an impact on homeowners’ insurances, but luckily in a positive way. Your homeowners’ insurance is in part determined by the value of your home.
When the housing market cools and the values of homes drop, newly purchased homes and insurances, will have lower premiums, because the to-be-covered amount is going to be lower.
Homeowners’ insurances are also impacted when they are already in effect, but it is wise to ask your insurer for this. Since a lot of premium decisions are done based on the overall status of the area.
This means that if an area in general decreases in value and the premiums get lower, it is possible that your homeowners’ insurance premium can also be lowered. This is, however, not a law or obligation of the insurer.
What can I do to get the best homeowners’ insurance for the future?
One of the most important things to do to keep the best homeowners’ insurances in these cases, is to have a conversation with your existing insurer.
None of them want you to move on to the next and will often offer a new deal to keep you as their customer.
The other main thing to keep the best homeowners’ insurance for the future is to look around at other homeowners’ insurances .
If your insurer is not willing to decrease your premiums when the value of your house, or those in the neighborhood, decreases, there might be others willing to get you a better deal.
Overall, the biggest problem of the declining housing market in CA, IL and the east coast is the mortgage cost. As selling your house would mean losing a lot of money on your mortgage.