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Texas Insurance Filings Turned Negative. The Five Years Before Them Already Took $19,000 of Loan Off a Houston Rental.

By Steve Waller · September 28, 2026

Texas Insurance Filings Turned Negative. The Five Years Before Them Already Took $19,000 of Loan Off a Houston Rental.

The Texas Department of Insurance is now showing filed rate requests of negative 0.8% for August and negative 1.8% across June through August - the first negative prints in five years. They arrive after the average Texas homeowners premium went from $1,987 in 2020 to $3,506 in 2025, which is $126.58 a month, and at a 7.03% thirty-year that is about $19,000 of supportable debt gone from a rental file. The ten-year closed Friday at 5.17% after touching 5.18% on Thursday, its highest print since 2007.

The insurance line stopped rising

The Texas Department of Insurance publishes a running average of the rate changes carriers are asking for. Its current reading is negative 0.8% for August 2026 and negative 1.8% across June, July and August. Both are filed requests rather than approved outcomes, and both average across homeowners, renters, condo and mobile homeowner policies. They are still the first negative prints on that page in five years.

For anyone underwriting a Texas rental this is a bigger deal than it sounds. Insurance is not a soft assumption on a DSCR file. It sits inside PITIA, the coverage ratio is struck against that whole figure, and a premium that is wrong by fifty dollars a month moves the ratio by more than most borrowers expect it to.

What the five years before this cost

TDI's own premium series, drawn from the Texas Statistical Plan for Residential Risks, runs like this:

That is $1,519 a year added to the expense line of the average Texas house in five years, a 76.4% increase, and it works out to $126.58 a month. The deceleration is real - 2025's 4.3% is a fifth of 2023's 21.1%, and this summer's filings are below zero. The level is not coming back.

$126.58 a month is about $19,000 of loan

Here is the conversion every rental file turns on. At a 7.03% thirty-year rate, which is where Freddie Mac's survey printed on 24 September, one dollar of monthly payment supports $149.85 of principal. It runs backwards just as cleanly: on a DSCR file, a dollar of monthly operating expense comes out of net income before the ratio is struck, so it removes that same $149.85 of debt the file can carry.

Five years of Texas insurance increases have therefore taken about $19,000 of supportable debt off a Houston rental at an unchanged coverage ratio. Not $19,000 of value - $19,000 of loan. On a cash-out refinance that is $19,000 of proceeds that do not arrive at the closing table, on a property whose rent has not moved.

The rate line went the other way in the same month

While the expense side was flattening, the financing side took back more than the expense side gave. The ten-year Treasury opened September at 4.79%, touched 5.18% on Thursday 24 September - its highest print since 2007 - and closed Friday at 5.17%. That is 38 basis points in a single month, four weeks of climbing, with no break in it.

Freddie Mac's thirty-year survey crossed seven percent to 7.03% on 24 September, from 6.95% the week before and 6.30% a year ago. Put both rates against the same file: $1,500 a month of payment bought $242,337 of thirty-year debt at 6.30% and buys $224,780 at 7.03%. That is $17,557 of borrowing capacity gone in twelve months from the rate line alone.

Two separate lines on the same underwriting sheet, each worth about eighteen or nineteen thousand dollars of loan, moving in opposite directions. The difference is that one of them has now stopped.

What the relief is actually worth

Do the arithmetic before getting excited about it. Negative 1.8% applied to a $3,506 premium is $63 a year, or $5.26 a month, or about $790 of supportable debt. That is a rounding error against the $19,000 that came out, and it is a filed request, not money in anybody's escrow account.

What it changes is the forecast, not the file. An underwriting assumption that next year's premium is fifteen or twenty percent above this year's has been correct for four straight years and is now the wrong default. A five-year hold that was penciled with compounding insurance escalations is a different deal if that line goes flat.

Houston's own numbers are not helping

HAR's August figures leave the property side where it has been all summer. Single-family closings came in at 7,100, down 11.5% against August 2025. The median price was $330,000, five thousand dollars below a year earlier. Active listings stood at 38,947, up 0.5%, supply at 5.3 months unchanged from last year, and days on market at 54 against 52. The average single-family lease price was $2,412 against $2,414 in August 2025.

Set the premium against that rent. Insurance at $3,506 a year is 12.1% of the average Houston single-family rent. In 2020 it was 6.9%. More than five points of gross rent moved from the owner to the carrier in five years while the rent itself went nowhere at all. That is the whole reason Texas rental files have been failing coverage on the expense line rather than the rate line, and it is why the ratio has to be run on a real binder rather than a percentage of value.

The supply and margin side, briefly

Census put August single-family permits at 878,000 annualised, down 1.8% on July and up 1.3% on the year; starts at 918,000, up 7.6% on the month and 5.2% on the year; and completions at 816,000, down 10.4% on the month and down 22.9% on the year. The South carried permits of 527,000, starts of 531,000 and completions of 485,000. Builders are still starting houses faster than they are finishing them, which keeps the resale comp set thinner in twelve months than the start figure implies.

On the margin side there is nothing new to report. ATTOM's second-quarter flipping report has still not appeared as of this morning, so the 18 June first-quarter report remains the current read: a 25.4% national gross return on a $66,000 gross profit, against 7.2% in Houston, 5.1% in San Antonio, 4.3% in Dallas and 2.0% in Austin. Those are gross figures, before a dollar of rehab.

What this changes about a file on the desk

Three things, in order of how much money is in them.

None of this changes which deals work. It changes which line of the sheet is worth arguing about, and right now that line is the rate, not the premium.

Sources

Market data is from public sources and is provided for information only. Nothing here is an offer of credit, a rate quote, or investment advice. Financing is subject to underwriting, lender approval, appraisal or valuation, title, insurance, property eligibility and program availability.

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