Rising Costs Threaten Homeownership

A new statewide survey has found that home insurance premiums in Illinois have risen sharply, increasing 50% between 2021 and 2024. The three-year trend, which averages a compounded annual increase of 14.5%, places Illinois as having the second-highest rate of increase in property insurance costs among all 50 states.

The findings reflect broader rate hikes across the industry, including those from major insurers such as Allstate. The data focused specifically on property/casualty insurance related to homes and residential real estate.

Rising insurance premiums can have a significant impact on prospective homebuyers, particularly young families and first-time buyers. Because property/casualty insurance is typically required as part of a mortgage agreement, higher premiums can affect affordability. Mortgage lenders generally require that homes be insured up to or beyond the lender’s equity in the property, making insurance a non-negotiable part of the homebuying process.

The sharp rise in insurance costs adds to a growing list of financial pressures facing working families in Illinois. Combined with inflation, rising property taxes, and a high cost of living, many households are finding it increasingly difficult to afford homeownership. Advocates warn that this trend could widen the gap between renters and owners and contribute to a climate that makes it harder for families to build long-term financial security in the state.