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.
Climate Disasters Driving Costs
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.
Data Snapshot: Where Delinquencies Are Rising Fastest
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)
State-Specific Stress Points
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.
Climate Disasters Compound Payment Challenges
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.
Bottom Line: A Climate-Fueled Housing Crisis
The data is clear: climate change is destabilizing the housing market by driving up insurance and tax costs, leading to rising mortgage delinquencies and financial insecurity. Without systemic climate action to curb emissions and build resilient infrastructure, the intersection of climate extremes and the housing market will continue to erode financial stability across the United States.