April 28, 2026, 5:05 a.m. ET
When newlyweds Dallin and Emma Wood were shopping for their first home near Salt Lake City this spring, their real estate agent told them to expect extra costs once they became owners.
“He explained very clearly that taxes are going to fluctuate,” said Dallin, a 26-year-old engineer. And in an area where hail is a constant danger, the Woods knew all too well how important property insurance is.
Thanks to those conversations, “we feel prepared,” he told USA TODAY. “My wife and I would have never felt comfortable buying a house if we didn’t know what the worst-case scenario might be.”
As tax levies and insurance premiums surge, the possibility of a “worst-case scenario” does, as well. Even as the vast majority of Americans continue to opt for fixed-rate mortgages, the ancillary costs of ownership fluctuate – mainly upwards.
Those stresses have been on full display in the escrow accounts that mortgage companies maintain in order to pay taxes and insurance on behalf of homeowners. An analysis of escrow accounts by real estate data provider Cotality for USA TODAY found that as many as 65% of all homeowners have escrow shortages, at an average of $2,157.
A shortfall, if there is one, isn’t problematic in and of itself. Mortgage servicers set up escrow accounts based on an estimate of how much they’ll be paying on behalf of borrowers. The accounts are reviewed every year and an analysis is sent to the borrower. If there’s a shortage, it can usually be funded over the coming year.
Still, some observers see the magnitude of the problem as another manifestation of a broader affordability crisis. In an economy where many Americans are living paycheck to paycheck, seeing the monthly mortgage payment rise at all, let alone by hundreds of dollars a month, may become a tipping point.
The recent jump in costs
The most recent surge in monthly costs comes after an unsettled period in the housing market. The frenzied rush to buy during the pandemic years, when mortgage rates were at all-time lows and more Americans were working from home, pushed home prices up dramatically. As a result, property taxes have jumped 15% between 2019 and 2024, Cotality data shows.
Meanwhile, a jump in natural disasters and uncertainty about a changing climate have pushed property insurance costs up a whopping 70% between 2019 and 2025, according to a Dallas Fed report published in March.
Altogether, those costs, including private mortgage insurance, if a borrower has it, can make up over 40% of the total monthly housing payment in some parts of the country, Cotality’s research shows.
Higher insurance costs can cause financial distress
While Dallin and Emma Wood expect to be able to manage additional costs, many Americans aren’t so lucky.
Faced with increases in insurance premiums,, many households wind up relocating, the Dallas Fed report found. “A $1,000 increase in insurance premium rates corresponds to a 0.54-percentage-point increase in relocation probability,” the researchers wrote.
But when homeowners are unable to move or otherwise lower their insurance costs, it can be serious. “Higher premiums lead to meaningful financial distress,” the report says. “Increases in annual insurance premiums raise the likelihood of falling behind and becoming delinquent on mortgage payments. We estimate that premium increases pushed roughly 31,000 mortgages into delinquency in 2022.”
Katelyn Gravell is a housing counselor with Neighbors Helping Neighbors, a New York City-based nonprofit. Gravell hears from people who’ve received word that their escrow accounts are short “all day, every day,” she said.
Most of the people who contact her are unable to pay more every month, in particular the roughly 75% or so of her clients who are elderly and on fixed incomes, she said. During just one recent one week, she had to refer three people to food pantries.
“They have rising costs related to their taxes, their insurance, but also food and transportation and everything to survive,” Gravell told USA TODAY. “Every area of life is increasing, right? And in general, I feel like our support networks are decreasing.”
How to handle rising housing costs
There are some steps homeowners can take when faced with rising costs.
First and foremost, talk to your mortgage servicer, said Sharon Cornelissen, director of housing at the national nonprofit Consumer Federation of America. Make sure you understand what they are trying to tell you, and if you can’t afford something, talk to them about it.
“They should be willing to work with you because they want to keep you in your home,” Cornelissen said.
Find out whether you qualify for a property tax exemption. Every jurisdiction is different, but many have programs that help reduce costs for owner-occupants, for elderly homeowners and for those who have special needs or disabilities.
You can also shop around for a new insurance policy. Make sure you know what your policy covers, and consider making changes if it makes sense.
And if you need some guidance, reach out for help. Housing counselors like Gravell are part of a national network certified by the Department of Housing and Urban Development. The White House has slashed HUD’s budget overall, and the housing counseling portion specifically, but you might still be able to get some help. Just be careful about responding to unsolicited offers of assistance, Gravell said: There are a lot of scammers taking advantage of needy, confused homeowners.
There may be some consolation in the fact that some housing experts, like Cotality’s chief economist, Selma Hepp, think that the recent period of skyrocketing housing costs may be tapering off. After several years of stagnation in the housing market, home prices are actually declining slightly.
But that may not be the case everywhere. And many homeowners feel like they’re barely treading water as it is.
“It’s just really challenging for people in general,” Gravell said. “I think there’s a lot of confusion as to why everything costs so much. Why isn’t there more support? And why isn’t the support that’s there more organized to be more effective?”
