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Climate risk is reshaping the U.S. housing market

April 30, 2026

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The housing market is facing growing pressure from climate-related risks and costs, making proactive integration of climate risk into housing finance strategies critical.

ICE recently published a white paper unveiling new research that quantifies how extreme climate events and long-term exposure are influencing mortgage payment stress and home price growth.

Using loan-level performance data, event exposure metrics, and ZIP-level analytics, the study reveals:

  • Delinquency probabilities rise +21% after tropical storms/hurricanes, +18% after floods, and ~+250% after wildfires, typically within 1-3 months.
  • Loans in high hurricane and flood-risk regions show 30%+ higher severe delinquency rates, even after borrower/loan controls, with flood insurance associated with a meaningful reduction in credit stress.
  • On average, homes in high flood-risk ZIPs appreciate 0.2-0.4% slower per year compared to lower risk areas.

Identifying high‑ROI opportunities across the lending process

The findings show that climate risk and extreme weather events are affecting mortgage performance and housing values in clear, measurable ways. ICE integrates McDash® performance data, event exposure insights, climate risk scores and Home Price Index (HPI) analytics providing a holistic perspective on climate-related credit and valuation risk.

This report is focused on the direct impacts of climate hazards on mortgage performance and home values. It is divided into three chapters that each focus on a different timescale at which climate risks are influencing the market.

Download the full research paper here.

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