If you’ve been in real estate the past few years, this won’t come as a surprise: insurance premiums are going up—and fast. Whether you’re working with first-time buyers or longtime homeowners, those rising costs are creating new hurdles for affordability and homeownership.
For buyers, higher insurance premiums can limit what they can afford each month, making it harder to get into a home. And for current homeowners—especially those still paying off a mortgage—those increases add pressure to their monthly budgets. Some are even choosing to skip coverage entirely if they own their home outright, which brings its own risks.
You’ve probably already felt the effects in conversations with clients, but let’s dig into the data. What’s really going on—and how does it affect our local market, especially condos and HOAs?
✅ TL;DR for Busy Agents:
- Insurance costs are way up—nationally and in Minnesota.
- HOA fees have jumped, especially since 2023.
- Condo prices are cooling—but higher monthly fees may still keep buyers out.
- Storm damage, reinsurance costs, and rising materials/labor are big drivers.
- Be proactive with clients: understand insurance-related costs and help them navigate the risks.
🧭 What the Data Shows
Nationally, homeowner’s insurance costs have taken off. Premiums started climbing in 2023 and saw a sharp spike in 2024. While the pace of growth may be slowing slightly in 2025, we’re still looking at a significant overall increase over the past two years. See Figure 1:
Figure 1: Nationwide price index for homeowner’s insurance (2018-2025)
In Minnesota, it’s even steeper. According to the Minneapolis Fed, homeowner’s insurance premiums rose 39.1% between 2017 and 2023, outpacing both the national average (34%) and inflation (24%).
🏢 Condos & HOAs: Feeling the Squeeze
Condos are feeling this trend in a unique way. That’s because HOA fees typically include insurance for shared parts of the building—think roofs, walls, and common spaces. So when insurance costs rise, those HOA fees often do, too.
Using MLS data, we looked at median HOA fees across the market. For several years, HOA fees increased about 4% annually. But in 2023, that jumped to around 8%, and it’s stayed elevated. See Figure 2:
Figure 2: Twin Cities median monthly HOA fees
(12-month rolling average, 2018-2025)
Here’s where it gets more interesting: while HOA fees are climbing, condo prices are cooling. See Figure 3:
Figure 3: Change in condo median sales price (dotted) vs. HOA fees (green) (12-month rolling average, 2018-2025)
As shown in our data, price growth slowed from nearly 6% to just 1%, with some decline visible in late 2024.
So what does this mean?
- For owners: They’re paying more in monthly fees, while seeing slower (or even negative) growth in the value of their home.
- For buyers: Slower price growth could make entry into the condo market more accessible—but rising monthly costs from HOAs might cancel out those benefits.
Some sellers may be lowering prices to help offset high HOA fees and attract buyers. But so far, that hasn’t translated to higher demand. If you check out InfoSparks, you’ll see that since early 2024, closed and pending sales are down, while inventory and days on market are up.
We’re keeping a close eye on these trends—especially as they relate to affordability and accessibility in the condo space.
🌪️ What’s Driving the Increase?
Even though Minnesota isn’t dealing with hurricanes or wildfires, we do get hit hard by wind and hail. According to the Minneapolis Fed, billion-dollar disaster events in our region are now 12x more common than they were in the 1980s.
That’s only part of the story. Insurers here have taken heavy losses in recent years—not just from storm claims, but also from rising costs of doing business:
- Reinsurance (insurance for insurers) is up nearly 60% since 2020, as seen in Artemis’ data.
- Building materials and labor costs have jumped significantly.
- Claims are easier to file thanks to apps and online portals.
- Insurers now use hyper-local climate models to assess risk—sometimes down to the specific lot—making some properties more expensive to insure.
Figure 4: Price indexes for construction materials & labor (2018–2025)
All of this adds up to higher premiums for buyers and owners.
🧠 What Can Realtors® Do?
This isn’t just a background trend—it’s something that’s showing up in transactions. As a Realtor®, it’s important to:
- Factor in insurance costs and HOA fees early in the buying process, especially with condo clients.
- Help buyers evaluate risk by looking at things like the age of the roof, past claims, and nearby flood or storm zones.
- Use pricing strategy wisely when listing condos—know that elevated HOA fees might make buyers hesitate.
We’ll continue tracking these changes and sharing what we learn. In the meantime, use this info to help your clients make informed, confident decisions.