TheZebra.com Reports Nearly Half of First-Time Homebuyers Could Struggle With Mortgage Costs as Insurance Premiums Climb

Leading insurtech’s annual report on the state of homeowner’s insurance highlights generational trends, state-by-state rates, strategies for consumers to save and more

AUSTIN, Texas--(BUSINESS WIRE)--TheZebra.com, the easiest way to compare and buy insurance, today released its 2026 State of Insurance™ | Home Report. This annual report offers a comprehensive look at home insurance costs, specifically digging into what first-time homebuyers can expect for the year ahead.

The report paints a clear picture of today’s first-time homebuyer: a smaller, older and more cost-conscious segment navigating an increasingly challenging market. First-time buyers now account for just 21% of all home purchases, continuing a steady decline from 24% in 2024 and from 40% prior to 2008. At the same time, the median age of a first-time buyer has climbed to a record-high of 40 years old.

“While housing affordability is anticipated to improve this year, it's clear that first-time buyers still face significant affordability challenges, especially when factoring in rising insurance costs,” said David Seider, Chief Commercial Officer at The Zebra. “It’s critical to make sure you’re getting the best value for your dollar. Shop around, compare a few quotes, and don’t just set it and forget it — check in on your coverage regularly to make sure it still fits your needs. And don’t be shy about asking for discounts either — some insurers offer savings for new or first-time homebuyers that are worth taking advantage of.”

To understand these trends further, The Zebra also conducted a national survey of first-time homebuyers. Key findings include:

• Eye on Affordability: 74% said homeowners insurance is a significant portion of their housing budget, and 47% would struggle to pay their mortgage if premiums rose.
• Expectations vs. Reality: First-time buyers expected to pay an average of $2,692 for insurance premiums in 2025, but ended up paying slightly more, with an average of $2,887.
• A Need for New: 40% of first-time home buyers bought a home built in 2020 or later, compared with only 8% of other homeowners who own similar aged homes.
• To Be Safe: 83% are considering adding additional coverage to their policy in the coming year as environmental threats and economic instability increase.
• Savvier Shoppers: First-time buyers shop for insurance more frequently and comprehensively using tools such as comparison sites. 55% of respondents reported reading their insurance policy thoroughly, compared to only 22% of other homeowners.

According to The Zebra’s data, nationally, the average annual home insurance premium in the U.S. is $2,966, almost a 6% increase from 2025, though costs can vary widely based on factors such as a home’s age and condition, value and location. Florida continues to have the most expensive home insurance premiums in the country, with an average annual cost of $9,449, driven by hurricanes, high insurance fraud rates and the growing costs of operation in the area. Oklahoma, Mississippi, Louisiana and Nebraska also have average costs exceeding $5,000 a year for home insurance, primarily driven by the threat of wind and hail.

“With climate risks on the rise, it’s more important than ever to make sure you have and maintain the right coverage for your home,” said Seider. “Start shopping for insurance before you even make an offer so you know what to expect and can factor it into your budget. And depending on where you live, it’s worth considering additional coverage — standard policies don’t always include risks like floods, earthquakes, or hurricanes.”

To view the report in full, visit https://www.thezebra.com/state-of-insurance/2026-soi-home/.

About TheZebra.com: TheZebra.com is the trusted partner for American insurance customers. People turn to The Zebra for easy-to-use services and tools and friendly, licensed advisors to get the insurance they need in a way that works for them. This ongoing relationship goes beyond a single transaction. For over 10 years, The Zebra has helped people across the country by providing guidance and solutions for their insurance needs. In today’s digital world, The Zebra’s customer-centered approach offers people the choices they want and simplicity they need.