New Mexico Homeowners Pay Some of the Lowest Insurance Costs In The Country, But Wildfire Risks Could Change That

New Mexico homeowners enjoy some of the lowest insurance premiums in the nation.

While costs are soaring in Gulf Coast and wildfire-prone states, new data from the U.S. Census Bureau and the Realtor.com® 2025 Climate Risk Report show that New Mexico remains a relatively affordable place for homeowners coverage.

New Mexico’s Insurance Costs Stay Affordable

According to the American Community Survey (ACS) data from the U.S. Census Bureau , New Mexico homeowners with a mortgage typically pay $1,000–$1,499 annually for homeowners insurance, while those without a mortgage average $800–$999. Overall statewide costs fall into the $1,000–$1,499 range.

New Mexico has 608,986 insured homeowner households in total—300,803 with a mortgage and 308,183 without. Among mortgaged owners, 29,199 pay less than $100 annually and 15,930 pay $4,000 or more. Among those without a mortgage,111,086 pay less than $100 and 8,959 pay $4,000 or more.

Compared with nearby states, New Mexico is on the affordable end. Arizona homeowners with a mortgage average $1,000–$1,499, aligning closely with New Mexico. Utah also falls into the $1,000–$1,499 range for mortgaged households, with non-mortgaged owners averaging $800–$999, just like New Mexico. Colorado, by contrast, is more expensive, averaging $2,000–$2,499 for mortgaged households. Texas is similarly high, with homeowners also paying $2,000–$2,499. This makes New Mexico one of the most affordable states in the Southwest for homeowners coverage.

Climate Risks Across the Region

The Realtor.com 2025 Climate Risk Report highlights how insurance costs rise in states with severe climate exposures. Miami, FL homeowners top the nation, paying $22,718 annually, or 3.7% of home value. Florida metros such as Cape Coral, Sarasota, and Tampa also face some of the steepest burdens.

New Mexico does not appear on the report’s list of metros with the highest insurance burdens, nor is it highlighted for flood or hurricane risk. However, wildfire is a growing concern. In the Fall of 2025, after a particularly active summer for fires, communities in Bernalillo, Sandoval, Taos and Colfax counties received Wildfire Defense Grants. They were identified as areas being at a “high or very high” risk for wildfires. The grants allow them to plan for and reduce the risk.

Nationally, 5.6% of homes—worth $3.2 trillion—face severe or extreme wildfire risk, with California representing the largest share. New Mexico’s dry climate and forested mountain regions expose it to some of the same dynamics, though its smaller housing market helps keep statewide averages low for now.

A National Affordability Challenge

New Mexico’s affordability stands in contrast to national trends. The Realtor.com 2025 Insurance Affordability Report found that 75% of Americans believe homeowners insurance could soon become unaffordable, while nearly half said they had already faced challenges renewing or obtaining coverage.

These pressures are already influencing buyer behavior. Nearly 30% of homebuyers said they had completely changed the areas where they were searching because of insurance concerns, while another quarter said they had overhauled their strategies altogether. Even more troubling, 58% of homeowners said they would consider dropping insurance entirely if premiums rose too high, with Gen Z homeowners the most likely to do so.

For now, New Mexico remains one of the more affordable states for homeowners insurance. But with wildfire risk on the rise and national affordability pressures mounting, the state’s advantage may be tested in the years ahead.

This article was produced with editorial input from Dina Sartore-Bodo, Gabriella Iannetta, and Allaire Conte.