JOSH EDELSON/AFP via Getty ImagesĪccording to Eby, the most overvalued markets are in areas that are already seeing 'dramatic increases in climate risk and rising costs of home ownership due to the rising costs of protection through insurance products,' he said.

In this picture: A home that survived the Mosquito fire is seen surrounded by flames and smoke in Foresthill, an unincorporated area of Placer County, California on September 13, 2022. 'Our recent research identified the size of the existing climate insurance bubble and found that properties were overvalued by an average of 15 to 30 percent across markets where insurers were already responding to climate risk and pushing property owners to the state-run 'insurers of last resort',' Matthew Eby, the founder of First Street Foundation, told Newsweek. The nonprofit estimates this could reach a total of nearly 34,000 homes across the country. are estimated to be overvalued in relation to their relative climate risk, according to a new report by nonprofit First Street Foundation.Īs the frequency and severity of extreme weather events increases with climate change, according to several recent scientific studies, American homes in the most impacted states-such as California and Florida-are more vulnerable to damages from hurricanes, floods, fires, and earthquakes.Īccording to a recent research by First Street Foundation based on climate modeling and details on residential buildings across the U.S., the number of homes in the country likely to be destroyed by flames every year is liable to double over the next 30 years.

A quarter of residential properties in the U.S.

Housing market bubble