Flood Risk and the U.S. Mortgage Market

Flooding is the most expensive natural disaster in the U.S., yet many homeowners remain underinsured against its financial impact. A new report from the Consumer Financial Protection Bureau (CFPB) highlights gaps in flood insurance coverage, particularly in inland areas that are often overlooked. Using data from FEMA and the First Street Foundation, the study reveals that flood risk is more widespread than previously understood, raising concerns about mortgage applicants’ ability to recover from potential flood damage. Understanding these risks can help policymakers and homeowners make informed decisions about flood preparedness and financial resilience.