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This research quantifies the financial impact of flood risk carried by American homeowners and how those dangers are growing as flood risks worsen due to a rapidly changing climate. First Street Foundation found that there are nearly 4.3 million residential homes (1–4 units) across the country with substantial flood risk (1% annual) that would result in economic damage. The research allows for the calculation of an average annual loss (AAL) statistic for each residential property in the contiguous United States, a key metric used to estimate the dollar value of damage associated with flood risk on an annualized basis.

The paper finds that while total expected annual loss for these properties across the U.S. is $20.0 billion this year, it grows to nearly $32.2 billion a year in 30 years—an increase of 61%—due to the impact of a changing climate. Furthermore, the analysis demonstrates that if all of these homes were to insure against flood risk through the National Flood Insurance Program (NFIP) current pricing structure, those rates would need to increase 4.5 times to cover the risk. These patterns vary across the country, but consistently show an underestimation of economic flood risk in both coastal and inland regions.