The outlook for new home construction and purchases is improving as 2026 approaches. After contracting last year, housing statistics are forecast to rise 3% this year. Several factors are contributing to renewed buyer demand. Wage growth is outpacing inflation, home prices are moderating, and mortgage rates have trended down by half a point in recent months. Rates could decline slightly further over the course of the year. Lower interest rates are also helping builders finance new community projects. Combined with pent-up demand during the winter months, these conditions could support a strong spring market.
At the same time, homeowners insurance availability and affordability present challenges in many markets. Premiums have increased 21% nationally over the past three years and are expected to rise another 8% in 2026. As a result, insurance is now the fastest-growing component of monthly housing payments, which include mortgage, taxes, and insurance. In areas with higher weather-related risks, premiums are rising faster. Some insurers continue to reduce the coverage they write in those regions, creating uncertainty for buyers and builders alike.
Insurance Costs Add Pressure to Buyer Budgets
Rising insurance costs are affecting overall affordability calculations for buyers. As premiums increase, they place additional pressure on monthly payment budgets. In higher-risk areas, coverage availability remains a concern, as some insurers are pulling back on new writings.
Tom Kriby, vice president of client development and partnerships at Westwood Insurance Agency, said builders can address this issue ahead of the spring homebuying rush by working with an insurance agency that reduces uncertainty around coverage and pricing.
Embedded Insurance in the Homebuying Process
One approach involves embedded insurance, which integrates an insurance coverage offer directly into the homebuying process. Traditionally, buyers have handled insurance separately, often at the last minute. Many buyers, particularly first-time homeowners, have limited experience with homeowners insurance. As a result, the insurance search may be delayed until weeks or even days before closing. Unexpected pricing or availability issues at that stage can delay closings or prevent transactions from moving forward.
With an embedded model, builders can incorporate homeowners insurance early in the sales workflow. Westwood Insurance Agency uses a technology platform that integrates with a builder’s sales process. By using property information, the agency pre-underwrites the home and delivers a personalized quote within 24 hours of contract signing. According to the company, this approach helps reduce closing delays and supports a smoother buying experience. In 2025, Westwood reported a Net Promoter Score SM of 92, which it said places the company in the world-class category for customer satisfaction.
Experience and Post-Closing Support
Experience is another consideration for builders evaluating insurance partners. Westwood traces its expertise in new construction home insurance to the 1950s, when a California builder established the agency. The company reports that it works with many of the nation’s leading home builders and provides insurance quotes for more than 75% of newly constructed homes across the United States. Its network includes more than 50 insurance companies, offering buyers access to a range of coverage and pricing options.
Westwood also provides support beyond the point of sale. When builders evaluate land tracts for acquisition, the agency provides information to help assess insurability hazards for specific regions and properties. It also provides guidance on resilient materials and construction types designed to withstand regional hazards, which can improve insurance availability and affordability.
After closing, the agency offers claims support and annual insurance reviews. In the event of a claim, the agency works with homeowners to guide them through the process. Annual reviews identify potential coverage gaps and determine whether policyholders are over- or underinsured. If a customer receives a significant premium increase or a non-renewal notice, a licensed customer service representative can access the agency’s network of carrier partners to seek replacement coverage.
As the spring homebuying season approaches, insurance costs and availability remain key considerations in the new-construction market. Builders and insurance agencies continue to explore ways to integrate coverage solutions earlier in the transaction process to address these challenges.