1、 CONSUMER FINANCIAL PROTECTION BUREAU|JANUARY 2025 Flood Risk and the U.S.Mortgage Market 1 FLOOD RISK AND THE U.S.MORTGAGE MARKET Table of contents Table of contents.1 1.Introduction.2 2.Data description.6 3.Flood risk in the US and the mortgage market .10 4.Characteristics of mortgage applicants a

2、nd applications .16 5.Conclusion.20 Appendix A:Bibliography.22 2 FLOOD RISK AND THE U.S.MORTGAGE MARKET 1.Introduction Flooding is currently the costliest natural disaster in the United States.Flood events can cause substantial property damage that directly impacts the financial circumstances of hou

3、seholds,1 and this damage is not covered under standard homeowners insurance.Households must pay for direct damages through some combination of self-insurance and optional or required flood insurance.There are also significant indirect damages that are not covered by insurance such as adverse effect

4、s on credit scores,delinquency rates,default rates,and household income.2 Most existing studies of the effects of flooding are retrospective in nature by examining the effects of specific natural disasters on economic outcomes,rather than considering the potential economic impact of future flood ris

5、k.3 This analysis compares differences in flood risk using multiple sources to increase our understanding of flood risk exposure in the mortgage market and among communities that may be more financially at risk after a flood event.This report uses flood risk data from the Federal Emergency Managemen

6、t Agency(FEMA)and the First Street Foundation4 to estimate how flood risk is correlated with consumer mortgage application decisions.Because flooding is directly tied to property damage,the focus of the analysis is on approved mortgage loan applications.The analysis shows that the flood risk exposur