Your Insurance Just Changed and Nobody Told You

Most investors in North Carolina are about to get an insurance bill they did not plan for. And almost nobody wrote about it, because the news covered the wrong policy.

Here is what happened. In October 2025, the North Carolina Rate Bureau asked for a 68.3% increase on dwelling insurance over two years. In April 2026 it settled far lower: +5% on October 1, 2026, and another +5% on October 1, 2027.

That is good news. But read the word "dwelling" again.

The homeowners policy that got all the press is a different filing. That one settled at +7.5% on June 1, 2025 and +7.5% on June 1, 2026. If you read a headline about NC insurance last year, it was probably about that one. It was not about you.

And if your project is on the coast, it is worse. Beach areas of Brunswick, Carteret, New Hanover, Onslow, and Pender counties are absorbing a combined 31.9% over the two years on the homeowners side.

What your state is doing

Insurance is not one market either. Here is where the five states we lend in are headed this year.

State averages hide the part that matters. Inside South Carolina, the average annual premium runs about $5,720 in Charleston and about $2,610 in Columbia. Same state. Same insurers. More than double the cost.

If you are running one insurance number across every deal in your pipeline, you are wrong on most of them.

Property taxes: you do not get the break homeowners get

This is the part that surprises people.

Georgia passed HB 581, which caps how fast a homeowner's assessed value can rise. It sounds like protection. It is — for homeowners. The cap attaches to a homestead. Rentals, flips, spec homes, and vacant land get no cap. They are valued at full market value every year. And the base year resets when a home sells, so your flip resets the clock for your buyer.

South Carolina is harder still. Investment property is assessed at a 6% ratio instead of the 4% owner-occupied ratio, and value resets to full market value when you buy. There is a 25% relief exemption available on that reset — the ATI exemption — and most investors never file for it. Ask your closing attorney about it on your next SC purchase.

Then there is what happened in Nashville.

Tennessee has a rule that is supposed to prevent this. After a reappraisal, the county must set a "revenue neutral" rate so it does not collect a windfall. In 2025 Davidson County set rates 26% above revenue neutral in the Urban Services District and 39% above in the General Services District. The assessor's own office says it plainly: bills went up because of rate increases, not just value increases.

Revenue neutral protects the county's total. It does not protect your parcel. Knox County is running its own reappraisal in 2026 with the same setup.

New Hanover County, North Carolina revalued in 2025 and residential values rose an average of 67% since 2021. Wilmington itself came in at 63%. Wrightsville Beach hit 77%.

Materials are getting more expensive again

For a while material costs were cooling. That reversed.

• Residential building materials, excluding energy, rose 4.6% year over year in June 2026 — up from 3.7% in April. It is accelerating, not cooling.
• Softwood lumber is up 7.0% year over year. In April it was up 1.1%.
• Diesel is up 65.7% year over year — the largest increase of any input. That hits every delivery, every dumpster, every subcontractor's drive time.
• Roofing asphalt is up 9.2% year over year, and 4.0% in June alone.
• Building material costs are up 40% since December 2020. Builders surveyed by NAHB put the cost effect of recent tariff actions at about $10,900 per home.

If you priced a rehab budget six months ago and have not repriced it, reprice it.

Labor is a local problem, not a national one

Residential construction has lost 48,800 jobs over the past year. That is the 15th year-over-year decline in a row and the longest stretch since the Great Recession.

But the Southeast splits hard. Total construction employment, June 2026 versus June 2025:

One caution on that table. It counts all construction, not just housing. North Carolina's gain includes data center and infrastructure work, which competes for the same electricians and plumbers you need. A tight number can mean "hard to hire," not "lots of help available."

Nationally, 92% of contractors say they have a hard time filling positions, and 45% report project delays from worker shortages — the single most cited cause of delay. The Home Builders Institute puts the carrying-cost penalty of the skilled labor shortage at $2.66 billion a year across the industry, purely from jobs taking longer.

Why all of this compounds

The typical flip took 165 days from purchase to resale in the first quarter of 2026. Up from 160 days the quarter before.

Every cost on this page is a per-day cost. Insurance. Taxes. Interest. Utilities. Lawn. When your timeline stretches from 160 days to 165, you did not lose five days. You bought five more days of all of it.

And the exit is getting slower. North Carolina's statewide median days on market was 58 days in June 2026. In June 2024 it was 46. That is twelve extra days of carry on every deal, in two years, before you touch anything else.

What to do about it

None of this makes a good deal bad. It makes a thin deal a loss. The fix is the same as it always was: buy right, close fast, and get out before the carry eats the spread.

Data sources: U.S. Census Bureau and HUD; National Association of Realtors; National Association of Home Builders; John Burns Research & Consulting; Freddie Mac Primary Mortgage Market Survey; ATTOM Data Solutions; Redfin; Realtor.com; U.S. Bureau of Labor Statistics; and the state and local REALTOR® associations named above. Figures were current as of publication and change frequently. This article is market commentary for informational purposes only. It is not a loan offer, an appraisal, investment advice, tax advice, or insurance advice. Loan terms and approval are subject to underwriting by REI Transactional.