CONCLUSION
In 2024, there were 24 confirmed severe weather events in the US that garnered losses over $1 billion each. That’s compared to the 1980-2023 annual average of 8.5 events per year. These losses spread across the country from Oregon and Colorado, to Texas, Florida, North Carolina and more, impacting local economies.
With a particularly damaging year for many, how has the impact of these severe weather events adjusted consumer ideas of homeownership?
To find out, DocuSketch surveyed 1,000 US-based adults aged 18+ to discover the impact on housing choices, preferences for disaster-proof home features, and concerns around living in high-risk areas.
Severe weather shapes new attitudes toward homeownership
47% of Americans find homeownership less appealing
With the uptick in severe weather events, nearly half (47%) of Americans view homeownership as a riskier investment. Young Americans, traditionally at the age of buying their first home, are feeling even less bullish, with 61% of Millennials and 69% of Gen Zers saying severe weather makes homeownership less appealing. By contrast, Gen X (42%) and Baby Boomers (26%) are less affected, suggesting that other factors, like family or lifestyle, might influence their perspective on homeownership.
Additionally, the younger generations are more cautious about where they want to buy a home – over half (53%) of Millennials and nearly two-thirds (62%) of Gen Z feel they need to be more careful about choosing a location. On the other hand, 54% of Baby Boomers say they find homeownership appealing no matter the location, showing a more stable attitude toward buying a home.
Insurance costs and property damage concerns are driving young Americans away from homeownership
Another aspect of homeownership that has become more challenging in today’s climate is insurance. More than two in five Millennials (41%) and Gen Zers (44%) say the rising cost of insurance is making homeownership less likely, and concerns over property damage in high-risk areas are consistent across generations. More than two-thirds (69%) of all respondents worry about property damage in high-risk areas.
Relocation attitude differs based on generation, income, and finances
Generational differences in relocation likelihood
Oftentimes discourse around severe weather events leads to questions around why people live in that area. But the answer is complex, and relocating is often not a viable option. However, younger generations are more open to relocating if severe weather risks increase. Millennials (61%) and Gen Zers (58%) are the most likely to say they would consider moving, while just 38% of Gen X and 24% of Baby Boomers feel the same.
Overall, 40% of all respondents are less likely to want to live in an area more prone to natural disasters, regardless of renting or buying. The impact is even greater for Gen Zers, more than half (51%) of who are less likely to want to live in these areas. This could indicate the reversal of a years-long trend that saw younger working age Americans flocking to states historically prone to disaster such as Texas, Florida, and to an extent, Tennessee and Georgia where cost of living was lower, but income remained similar.
Income’s role in relocation decisions
Surprisingly, income didn’t make a big difference in relocation likelihood. Nearly a quarter (22%) of people earning $200,000+ would be “very likely” to move if severe weather increases. The data was similar for those making under $25,000 (25%) or between $25,000 and $34,999 (28%).
There are a few potential reasons for this lack of differentiation. First, wealthier individuals may feel less need to move since they’re better able to weatherize their homes, afford repairs, or have comprehensive insurance. Second, lower-income Americans may lack the funds or resources to move, even if they would prefer to relocate.
Regional trends and differences
Looking at the country as a whole, regional differences in relocation attitudes are particularly notable between the Northeast and the West. In the Northeast, 52% of residents say they would consider relocating if severe weather events became more frequent. Westerners, by contrast, show a slightly higher tolerance for risk, with only 46% indicating a strong likelihood to move from high-risk areas.
In the South, family and social bonds play a big role in housing decisions, making people more likely to stay in high-risk areas. Nearly half (44%) of Southerners say they would prioritize being close to friends and family over relocating due to disaster risks, compared to 35% in the Northeast, showing the weight social connections have on location, despite environmental risks.
Affordability meets resilience: New priorities in housing choices
82% of Americans cite cost of living as the top priority
When it comes to choosing where to live, despite potential risk of severe weather, cost of living is the leading factor in location decisions for all generations with 82% of Americans citing it as their top consideration. Gen Xers (87%), of Millennials (83%), and Gen Zers (79%) list living costs as a key consideration, which isn’t surprising given factors like salary stagnation and debt that influence younger consumers’ choices. Baby Boomers (75%), while still valuing affordability as a top priority, place slightly less emphasis on it.
The top three considerations for Americans overall are:
- Cost of Living
- Proximity to Areas of Interest
- Risk of Natural Disasters
For Gen Zers, risk of natural disasters held more weight, taking the second spot. This may point to Gen Zers becoming more risk averse in their financial decisions as the weight of inflation and rising home costs weigh into their choices.
79% of respondents would pay more for disaster-resistant home materials
As severe weather impacts increase, so does the conversation around new building codes and materials. Most Americans (79%) would even be willing to pay more for a home designed to better withstand severe weather events. This may be because Americans state their top concern about homeownership in a region prone to severe weather events is property damage or loss. Additionally, 63% of Americans are concerned about increasing insurance premiums, and 41% are concerned about their insurer rejecting their disaster-related claim.
Willingness to pay a bit more for disaster-resistant materials is consistent across Baby Boomers (62%), Gen X (55%), and of Gen Zers (54%) would pay a little extra for homes built with disaster-resistant materials, reflecting a broad interest in resilient housing. However, Millennials (47%) are less inclined.
One possible explanation is that Millennials, often burdened by student debt and other rising housing costs, may have less financial flexibility to prioritize disaster-resistant features compared to Gen Z counterparts. Gen Z has entered the housing market with potentially fewer financial obligations and a heightened sense of climate risks. It could also mean Gen Z are more aggressive in taking necessary steps to protect such investments.
What does this mean for the industry?
While evolving housing market challenges and rising insurance claims are creating a stark divide between generations, there are ways to begin to combat these risk factors. One clear path is utilizing more disaster resistant materials in building new homes, especially in areas high-risk for severe weather events.
Technology is another critical path, especially in solving growing insurance challenges. The current market is fraught with claim delays that drive up prices and delay restoration efforts. But utilizing technology such as AI or immersive imagery can help speed up the recovery process through consistent, accurate documentation, helping more people protect their investments and rebuild their communities.
To learn more about how technology can help, check out DocuSketch.
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