Housing costs are through the roof. Escrow shortages are one symptom
As many as 65% of homeowners in the US have escrow shortages, with an average shortage of $2,157, due to surging tax levies and insurance premiums. The increase in costs is attributed to a 15% rise in property taxes between 2019 and 2024, and a 70% increase in property insurance costs between 2019 and 2025.
Homebuyers are facing unexpected costs due to rising property taxes and insurance premiums. An analysis by real estate data provider Cotality found that 65% of homeowners have escrow shortages, averaging $2,157. Property taxes have increased by 15% between 2019 and 2024, while property insurance costs have risen by 70% between 2019 and 2025. The surge in costs is attributed to the pandemic-driven housing market and climate-related natural disasters. Higher insurance costs can lead to financial distress, with a $1,000 increase in insurance premium rates corresponding to a 0.54-percentage-point increase in relocation probability. The increased costs can make up over 40% of the total monthly housing payment in some areas.
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