by Daniel Brouse
July 21, 2025
Mortgage delinquencies are climbing across the United States, with southern states like Florida, Georgia, and South Carolina facing the steepest increases. A major driver? Escrow payments -- which cover property taxes and insurance premiums -- have surged by 62% nationally over the last five years, a spike fueled largely by rising insurance costs and property taxes tied to climate-related disasters.
Extreme weather fueled by climate change has become the primary reason for soaring insurance premiums and local government costs. Hurricanes, floods, and severe storms damage infrastructure, triggering higher taxes to fund repairs and resilience projects. Insurers, burdened by record claims, are raising premiums or exiting high-risk markets altogether, forcing homeowners to pay significantly more to protect their properties.
This financial squeeze hits households hard, especially in states vulnerable to climate extremes. Those without conventional mortgages are particularly at risk since conventional loans often require adequate flood and disaster insurance, providing a buffer many lower-income or first-time buyers lack.
Here are the top 10 states with the largest year-over-year increases in serious mortgage delinquencies:
| State | All Loans | Conventional | FHA Loans | VA Loans | YOY Change | % Escrow Change (2019-2024) |
|---|---|---|---|---|---|---|
| Florida | 1.43% | 1.05% | 3.09% | 4.11% | 38 bps | 62% |
| South Carolina | 1.05% | 0.67% | 2.55% | 3.96% | 20 bps | 37% |
| Georgia | 1.12% | 0.71% | 2.66% | 3.71% | 18 bps | 38% |
| Nebraska | 0.81% | 0.48% | 1.75% | 3.68% | 16 bps | 43% |
| Texas | 1.11% | 0.74% | 2.54% | 3.41% | 16 bps | 21% |
| North Carolina | 0.83% | 0.57% | 1.88% | 3.18% | 15 bps | 49% |
| Louisiana | 1.87% | 1.25% | 3.96% | 5.44% | 14 bps | 52% |
| Colorado | 0.55% | 0.41% | 1.73% | 2.56% | 13 bps | 62% |
| Indiana | 1.09% | 0.66% | 2.62% | 4.01% | 13 bps | 49% |
| Oklahoma | 1.24% | 0.70% | 2.72% | 3.53% | 13 bps | 38% |
(Source: Cotality, 2025)
Take Florida: Property taxes there have jumped nearly 50% in five years while insurance premiums, particularly in hurricane- and flood-prone regions, have soared. Combined, these increases have driven the average escrow payment up 62% -- on top of mortgage principal and interest -- leaving many households financially exposed.
South Carolina has seen 14 insurers collapse between 2020 and 2023, leading to higher premiums for the remaining customers. Meanwhile, Georgia's average property taxes rose by more than $700 in just five years, with median home prices surging 65% since 2019 as the climate-fueled migration and development boom continue.
Mississippi, with the nation's highest overall delinquency rate, faces the worst of these intersecting crises. It has the lowest median household income in the country while ranking among the top 15 states most at risk for hurricane storm surge damage, making climate resilience and affordability a daily struggle for many residents.
Natural disasters directly disrupt mortgage payments by displacing families and damaging properties, forcing costly repairs before insurance payouts arrive. For example, Hurricane Helene devastated Asheville, NC, in 2024, and within a year, delinquencies in the region rose 1%. Even when homeowners catch up on delayed payments, subsequent premium hikes often increase monthly housing costs permanently, threatening long-term affordability.
Water Contamination and Treatment Failures
Natural disasters like floods and hurricanes threaten water treatment plants and can cause dangerous contamination of drinking water, particularly in areas with significant agricultural runoff. For example, the flooding from Hurricane Floyd in 1999 in North Carolina drowned tens of thousands of farm animals, and their decomposing carcasses contaminated drinking water sources, leading to a public health emergency. In response, companies like Miller and Budweiser converted beer bottling lines to produce canned drinking water for emergency relief.Disasters also damage wastewater treatment plants, leading to sewage spills, environmental contamination, and public health hazards. Disrupted operations and power outages hinder the ability to treat wastewater effectively, often resulting in untreated sewage flowing into waterways and neighborhoods.
Recent examples include:
Impact on Housing Markets: Florida Case Study
Climate damage is also destabilizing local housing markets. In Florida, condo markets are collapsing under the weight of skyrocketing insurance premiums, rising property taxes, and large special assessments for repairs and climate resilience measures.Following Hurricane Ian, many condo owners in Southwest Florida received special assessments ranging from tens of thousands to over $200,000 per unit to cover structural repairs, roof replacements, and flood resilience upgrades. These bills are often due immediately, creating severe financial hardship and forcing some owners to sell or enter foreclosure, further destabilizing local property values.
As climate disasters increase in frequency and severity, residents across the country can expect these trends to continue, with infrastructure damage translating into higher living costs, housing market instability, and worsening inequities in community resilience.
Climate change is already destabilizing the housing market by driving up insurance premiums, property taxes, and infrastructure repair costs, which in turn are leading to rising mortgage delinquencies and deepening financial insecurity for households. As extreme weather events intensify and infrastructure damage mounts, these pressures will only grow, eroding community stability and threatening long-term affordability across the United States.
Without systemic climate action to reduce emissions, strengthen infrastructure, and protect vulnerable communities, the compounding intersection of climate extremes and housing market fragility will continue to undermine economic security, leaving millions at risk in the decades ahead.
* Our climate model -- which incorporates complex social-ecological feedback loops within a dynamic, non-linear system -- projects that global temperatures could rise by up to 9°C (16.2°F) within this century. This far exceeds earlier estimates of a 4°C rise over the next thousand years, signaling a dramatic acceleration of warming.
We analyze how human activities (such as deforestation, fossil fuel use, and land development) interact with ecological processes (including carbon cycling, water availability, and biodiversity loss) in ways that amplify one another. These interactions do not follow simple cause-and-effect patterns; instead, they create cascading, interconnected impacts that can rapidly accelerate system-wide change, sometimes abruptly. Understanding these dynamics is essential for assessing risks and designing effective climate adaptation and mitigation strategies.