US Homeowners and Lenders Face Rising Risks from Extreme Weather

This briefing by RMI examines the financial risks that extreme weather poses to US homeowners and the mortgage industry, highlighting the disproportionate impact on low-income communities and people of color. It discusses the role of the Inflation Reduction Act in providing funding for climate adaptation and calls for better property-level climate risk data and coordinated financing to future-proof the US housing market.

• The Inflation Reduction Act, signed August 16, 2022, provides significant funding for climate adaptation, including over $3 billion in block grants for environmental and climate justice, $1 billion for energy and water efficiency and climate resilience in affordable housing, and approximately $2.6 billion for the National Oceanic and Atmospheric Administration (NOAA) to support community resilience.
• Climate-related hazards pose substantial financial risks to US properties, with the First Street Foundation identifying over 79 million properties facing wildfire risk and more than 14.6 million susceptible to substantial flood damage. In southern Florida, McKinsey & Company suggests property loss rates from sea level rise flooding could reach Great Recession levels by 2030, potentially tripling if a financial downturn occurs, with affected properties losing 5 to 15 percent of their value over the next decade.
• Extreme weather disproportionately affects historically redlined and underserved communities. Between 2010 and 2019, National Flood Insurance Program flood claims totaling $31 billion occurred disproportionately in zip codes where more than 25 percent of residents were Black. Additionally, Black homeowners were three times more likely to experience flood impacts during Hurricane Katrina, and 49 percent of residents in the worst-hit Houston neighborhood after Hurricane Harvey were non-White.
• The US mortgage industry, including lenders, insurers, and government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac—which back about 63 percent of all mortgage origins nationwide—faces risks from increased delinquency rates and decreased asset valuations. For instance, mortgage delinquency rates nearly doubled in the most flood-exposed neighborhoods following Hurricane Harvey in 2017 in Texas and Louisiana.

APA

RMI (2022). US Homeowners and Lenders Face Rising Risks from Extreme Weather. https://rmi.org/resources/financial-risks-of-extreme-weather-to-us-homeowners-and-lenders/

Chicago

RMI. US Homeowners and Lenders Face Rising Risks from Extreme Weather. 2022. https://rmi.org/resources/financial-risks-of-extreme-weather-to-us-homeowners-and-lenders/.

Wikipedia

{{cite report |author=RMI |title=US Homeowners and Lenders Face Rising Risks from Extreme Weather |date=16 August 2022 |url=https://rmi.org/resources/financial-risks-of-extreme-weather-to-us-homeowners-and-lenders/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2022homeowners, author = {{RMI}}, title = {{US Homeowners and Lenders Face Rising Risks from Extreme Weather}}, institution = {RMI}, year = {2022}, month = aug, url = {https://rmi.org/resources/financial-risks-of-extreme-weather-to-us-homeowners-and-lenders/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }