Climate risk threatens to widen the racial wealth gap

Homeowners of color are more likely to face major climate hazards — and the rising costs that come with them

Hispanic homeowners are more likely than white homeowners to own homes at major risk of wildfire. Black homeowners are more likely to face extreme wind.
The costs of homeownership are rising in high-risk areas, disproportionately affecting communities of color.
These rising costs could limit wealth-building opportunities for homeowners of color and widen the racial wealth gap.

SEATTLE, May 13, 2025 /PRNewswire/ — As weather-related natural disasters become more frequent and severe, not all U.S. homeowners face equal exposure to the risks. A new Zillow® analysis reveals that Black and Hispanic homeowners are disproportionately vulnerable to major climate risks like wildfire, wind and extreme heat.

Hispanic homeowners are more likely than white homeowners to own homes at major risk of wildfire, according to an analysis of First Street® data displayed on for-sale listings on Zillow. Black homeowners are more likely to face major risk of extreme wind. The racial wealth gap could be a driving factor, with these communities generally having fewer options within reach financially.
“The disproportionate burden of climate risk on homeowners of color threatens to deepen financial inequality,” said Kara Ng, senior economist at Zillow. “Climate risk is driving up homeownership costs due to rising insurance premiums and potential repair or rebuilding expenses after disasters. These added financial pressures can make it harder for families to build and maintain wealth through homeownership.”
Nationally, 25% of homes owned by Hispanic households are at major risk of wildfire. That’s significantly higher than the 18% of white-owned homes facing the same level of risk. Among homes owned by Black households, 60% face major wind risk, compared to just 32% of white-owned homes.
Flood risk is fairly balanced across racial groups. Homes at major risk of flooding make up between 12% and 14% of homes owned by white, Black, Hispanic and Asian American households. However, local statistics often tell a different story. In the New Orleans metro area, 95% of Asian American homeowners face major flood risk, as do 92% of Black homeowners and 86% of Hispanic homeowners. Only 76% of white homeowners in New Orleans face the same risk.
The opposite is often true in Florida, where a greater share of white homeowners face major flood risk in large markets near the coast, such as Miami, Tampa and Jacksonville. The racial wealth gap means these homes, which are typically more expensive, are more often within the budgets of white home buyers than Black or Hispanic buyers.
In addition to physical risks, climate risk also affects the livability of homes due to extreme heat and poor air quality. These conditions also disproportionately affect minority groups: 81% of Black-owned homes and 77% of Hispanic-owned homes face major heat risk, compared to 52% of white-owned homes. Asian American households have a disproportionate exposure to poor air quality. Thirty-two percent of homes owned by Asian American households have major air-quality risk — nearly three times the rate for white-owned homes (11%).
This research sheds light on how climate risk is deepening long-standing housing inequalities. As natural disasters grow in intensity and frequency, homeowners in high-risk areas see rising costs through higher insurance premiums, greater possibility of repairs and increased energy expenses. These burdens are not distributed equally, and this unequal exposure can limit wealth-building opportunities.
Home shoppers can explore climate risk data when browsing listings on Zillow. Insights into five key risks — flood, wildfire, wind, heat and air quality — are available on the search map and directly on for-sale listings, complete with risk scores and interactive maps. This information helps buyers and sellers better evaluate long-term factors affecting homeownership, such as safety, resilience and costs.

ClimateRisk Type

WhiteHomeowners:Share of Homes atMajor Risk

BlackHomeowners:Share of Homes atMajor Risk

HispanicHomeowners:Share of Homes atMajor Risk

Asian AmericanHomeowners: Shareof Homes at MajorRisk

Extremeheat

52 %

81 %

77 %

65 %

Extremewind

32 %

60 %

43 %

33 %

Wildfire

18 %

13 %

25 %

16 %

Flood

13 %

13 %

14 %

12 %

Air quality

11 %

9 %

21 %

32 %

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SOURCE Zillow