The devastation left behind in the wake of Hurricane Ian has Floridians reeling after the area was struck by the deadliest hurricane its seen since 1935. Now a new report from Zillow finds flood risks are having a growing influence on homebuyers.
The analysis Zillow conducted in partnership with ClimateCheck found an increase in mortgage denials and in potential borrowers withdrawing mortgage applications in areas with an elevated risk of flooding.
According to the report, climate change associated risks have been “central to conversations surrounding the future of housing in recent years, and this new evidence suggests that while climate risks may not have dented demand for housing, those risks may be taking more of an active role in the decision-making of buyers and lenders.”
The current rate of denials and withdrawals in high flood risk areas is higher than it was in 2017, the report says. They are also higher than in areas at risk for other climate-related problems like fires, drought, extreme heat and storms, which the analysis found are not affecting buyer behavior.
Zillow senior economist Nicole Bachaud says those higher rates of mortgage application denials and withdrawals in high flood risk areas is an encouraging sign that buyers and lenders are including flood risk in their decision making.
“Living around desirable coasts and other bodies of water, which tend to be more flood-prone areas, will continue to be a draw for homebuyers, but more and more are considering the additional risk,” Bachaud said. “We have not yet seen other types of climate risk make a dent in home-buying practices, so there is a lot of room left for change and continued education.”