Sky-High Florida Insurance Costs Propel Home Sales, BofA Says

Florida’s soaring home-insurance rates aren’t just making it less appealing to buy in the Sunshine State — they are also causing some existing homeowners to walk away from cheap mortgages.

Florida homeowners are “prepaying” mortgages with low interest rates about 50% faster than homeowners in other states, according to mortgage-bond data in a recent report by Bank of America. Prepaid mortgages are those that are paid off before maturity, and often indicate that borrowers have sold their homes.

Rising climate risks in hurricane-prone Florida have made it the most expensive home-insurance market in the nation. Private insurers are pulling back, ...