The COVID-19 pandemic housing boom rewarded one thing above all: timing. Families who managed to buy in the right metros before prices surged were able to convert affordability into equity and equity into wealth.
Timing may also shape what happens next.
Realtor.com® found that the biggest housing wealth gains of the pandemic era were concentrated in a select set of metros. But First Street’s climate-risk analysis suggests many of those same markets could face mounting pressure from rising insurance costs, shifting migration patterns, and a slower-moving repricing of risk.
“It ends up being this long process that erodes property value over time, decades at a time,” Jeremy Porter, chief economist of First Street, a climate analytics firm, tells Realtor.com.
In places such as Florida, where pandemic-era gains were especially large, that complicates the housing story by raising the possibility that the real estate wealth built over the past five years may not be durable enough to last until it’s handed over to the next generation.
That poses a new question for generational wealth: Not just who got in early enough to build it, but whether families in some of the country’s biggest boom markets will be able to preserve, leverage, or pass it on before climate risk starts to change the math.
Why Florida is the perfect test case
If the pandemic housing boom had an epicenter for wealth creation, it was Florida. Thirteen of the top 30 metros where homeowners built the most housing wealth from 2019 to 2024 were in the state, according to Realtor.com research.
The gains were particularly strong among baby boomers, who flocked to the area to enjoy tax advantages and good weather in retirement.
This generation also sits at the center of the Great Wealth Transfer, where an estimated $84 trillion is expected to pass from boomers to younger beneficiaries, according to projections from Cerulli Associates.
But that timeline is running headlong into projections from First Street that suggest as many as 55 million Americans across the country could relocate by 2055 due to risks from heat, wildfire smoke, flooding, and drought, according to First Street's Properties in Peril report.
One mechanism of that migration will also be the rising cost of staying. The same report suggests an 11.6% increase in average annual losses over the next 30 years.
Florida is at the center of this risk, with First Street finding that the state dominates both its “risky growth” and “tipping point” categories as rising insurance costs increasingly weigh on long-term property values.
It's a stark illustration of the new timing paradigm: Building housing wealth early may no longer be enough. Families may also need to know when to sell the asset before rising risk starts to erode its power.
Climate risk changes housing through costs, demand, and psychology
It’s important to note that a home doesn’t need to be affected by a climate disaster to have climate risk affect its value. Instead, values are dragged down by a complex mix of rising carrying costs, reduced demand, and changing buyer psychology.
This is already apparent in the changing calculus of home insurance. While once treated as an afterthought by buyers, it’s now a defining force in housing affordability.
First Street’s research finds that insurance made up roughly 7% to 8% of mortgage costs through much of the 2000s and early 2010s, then climbed to more than 20% from 2013 to 2022.
That dramatic increase doesn’t just squeeze current homeowners—it also makes homes harder for future buyers to afford, especially in the same markets that once looked like the best value.
Layer on top of that the prospect of large-scale migration away from climate-exposed areas, and the economics of risky neighborhoods begin to look very different over the coming decades.
That timeline is important to note, says Porter, because the process is often less dramatic than people expect—happening slowly, over decades.
Still, Porter cautions that risk alone does not determine a market’s fate. Desirability still matters. In places with strong jobs, population growth, and continued demand, climate shocks don't always lead to lasting decline.
“Being in an area that’s desirable becomes a protection effect from climate-risky disasters,” he says.
In these markets, strong economic fundamentals can help absorb at least some of the blow. New residents keep arriving, employers keep investing, and demand for housing remains high enough to support prices—even after a damaging event.
Miami is a good example of the dynamic Porter is describing. Even after suffering major flooding events from hurricanes—like Milton in 2022, which brought devastating flooding to the area—the city has the most $1 million homes in the U.S. It surpassed New York City as wealthy buyers continue to flock to the area.
Why the same boomtowns can still be vulnerable
It’s a confusing paradigm: Markets are at risk of losing value from rising costs related to climate risk, but some of the riskiest markets have sufficiently strong economies to hold those values up.
But that protection is not unlimited.
First Street projects that average homeowners insurance premiums will rise 29.4% by 2055 under risk-based pricing. And some of the sharpest projected increases are concentrated in areas that dominated the pandemic-era housing wealth map.
Jacksonville, for example, home to some of the biggest wealth gains for Generation Z and millennials, as well as baby boomers, is expected to see premium increases of 226%, according to First Street's Property Prices in Peril.
Other nearby metros that didn’t make the list but are still home to ample amounts of housing wealth are Miami—projected to see premium increases of 322% by 2055—and Tampa—expected to see premium increases of 213%.
So while homes may still benefit from strong demand and accumulated equity, as insurance costs rise and repeated exposure to climate events changes buyer behavior, the gap between a market’s recent gains and its long-term resilience may grow harder to ignore.
What this means for the future of generational housing wealth
One of the clearest findings in research from Realtor.com is how important timing is in creating generational housing wealth. Buying your first house by age 32 is associated with about $119,000 more net worth at age 50 than waiting 10 more years to buy.
That timing advantage also tends to ripple across generations. Households with homeowner parents are far more likely to become homeowners themselves, in part because family housing wealth can help bridge the two hardest parts of buying: coming up with upfront cash and getting into the market early enough to benefit from compounding home equity.
This is also where climate risk may create a new challenge. In higher-risk markets, the issue may not be only whether a home ultimately loses value, but also if families can leverage that asset at the right moment—before rising insurance costs, slower demand, or a market repricing of risk starts to weaken its power.
With 84% of U.S. census tracts vulnerable to some form of negative climate-related property value impact (totaling roughly $1.47 trillion in losses), according to First Street estimates, it's an important calculation for families with any amount of housing wealth to weigh.
And it's especially relevant in places like Florida—a state with mass housing wealth and climate risk. If the economics of owning and selling here becomes more volatile over the coming decades, then the family advantage may depend on knowing when to tap it.
