The cost of homeowners insurance is on the rise, and not just because property values went up -- almost 20% across the board -- during last year's homebuying frenzy.

How high insurance costs may go is anybody's guess at this time. But the Federal Emergency Management Agency is now operating under a new flood insurance rate structure that changes how it looks at risk.

Furthermore, the growing number of natural disasters is forcing insurers to reevaluate their risk, with the end result almost assuredly being higher premiums. Weather is even starting to inform lending decisions, with the distinct possibility that lenders will charge more for loans in high-risk areas -- or not write them at all.

Weather events always are a threat. But during last year's first nine months alone, the National Centers for Environmental Information counted a record 18 major storms, each with losses exceeding $1 billion.

Such events are why, back in 1968, lawmakers created the National Flood Insurance Program to protect property owners from flood losses. The NFIP also protects taxpayers who fund the program by reducing Uncle Sam's exposure. But almost annually, the NFIP well runs dry and requires additional appropriations from Congress, which, after years of inaction, has yet to reconstitute the program so it remains solvent.

Speaking of dry, as of Dec. 1, the NCEI also says moderate to exceptional drought conditions cover nearly half the country. So more disasters unrelated to flooding are in the offing, too.

To bolster its balance sheet, FEMA, which oversees the flood insurance program, has switched gears. Instead of rating risk solely on whether a house is located in a flood zone or not, the new formula looks at a variety of factors, including distance to a flood source, the severity and frequency of flooding, and property characteristics such as the cost to rebuild the property in the event of damage.

The result: Some 3.3 million homeowners who currently have coverage will pay more, according to a study from Porch, a provider of software and services to several home service industries.

The typical NFIP premium is $734 annually. FEMA predicts that 77% of those with flood insurance will see a price increase -- a hike of about $88 a year for most, according to Porch's calculations, but some by as much as $240 per year -- with the remainder enjoying a lower premium. For those hit hardest, the increase will be spread over a few years.

Granted, this only impacts owners who reside within a specified flood zone. But since floods can happen anywhere, anytime and for many reasons, it is a good idea to obtain coverage no matter where you live.

Floods are not covered by your homeowners insurance, but the costs of those policies are headed up, too.

"The growing number of climate events has left the insurance business reeling," says Jennifer Rasmussen, the author of a new white paper detailing what lies ahead for policy holders. "As the intensity and scope of future catastrophes grow, insurance rates for property owners will likely rise significantly," says Rasmussen, a vice president at SitusAMC, a technology provider in the real estate finance business.

According to LexisNexis, 39% of all home insurance claims in 2020 were due to catastrophic weather. And the SitusAMC paper says the rise in the number of severe hurricanes, wildfires, tornadoes and other weather events linked to climate change has created significant risk for insurance companies.

The impact is not limited to the coasts, either. Winter storms in Texas, for example, accounted for 40% of total property losses for insurers in the first half of 2021, and nonprofit Climate Central says the Lone Star State, not California, has the highest threat level for wildfires, with 72% of the state's population at risk.

Of course, recent demographic and migration trends are exacerbating the problem as more people move to flood- and fire-prone regions. A projected 1.2 million more houses will be at risk of flooding over the next 30 years, according to data from the First Street Foundation.

All of this has the mortgage business on edge as companies decide what to insure and at what cost. Some lenders have already started incorporating ATTOM Data Solutions' climate data into their decision-making scenarios, says the firm's Todd Teta. And more can be expected to do so.

A report from the research affiliate of the Mortgage Bankers Association says lenders "will not be spared" from the ravages of climate change. The physical destruction caused by extreme weather events will "influence the behavior" of lenders, investors and government-backed loan programs, it says.

The report says severe weather could lead to more mortgage defaults, placing increasing stress on housing and housing finance's sophisticated system of distributing risk across multiple stakeholders, including consumers, homebuilders, appraisers, originators and mortgage investors.

MBA officials say high-level industry discussions have taken place about incorporating weather-related risk into underwriting decisions. But Chief Economist Mike Fratantoni says that while regional climate models offer enough data, that's not the case for property-level decisions. "There just isn't enough information to make the call," he says.

Meanwhile, the Federal Housing Finance Agency, which oversees Fannie Mae, Freddie Mac and the Federal Home Loan Banks, has told these key entities to designate climate change as a priority concern, and to actively consider its effects in their purchasing decisions.

Eventually, lenders could charge a higher rate for a loan on a higher-risk property. They could require a larger down payment or a larger homeowners insurance policy -- perhaps even some sort of disaster policy. Or they just may not make the loan at all.

Homebuilders are an optimistic bunch. They normally purchase land or finished lots, spend thousands on lumber and myriad other materials, and start putting up houses -- often before the first customer walks in the door.

That's not the case now, though, and hasn't been for months. Because of the shortage of existing homes for sale, builders are selling everything before they even put a shovel in the ground.

According to market research firm Zonda, builders with available inventory are generally still selling well. In November, sales hit a seasonally adjusted annual rate of 744,000: a 12% gain from 662,000 in October.

Perhaps that's why builders are so upbeat right now. Even faced with a number of "stubbornly persistent" problems, the "builder sentiment index," as calculated by their trade association, actually moved higher in November.

After all but closing down this fall after running out of product, some builders -- but not all -- are starting to reopen their operations, according to John Burns Real Estate Consulting. In a recent survey, a Dallas builder told the firm they have a "huge number of communities coming online" soon. In Naples, Florida, a builder who had been sold out is taking reservations again; ditto for a builder in Chicago. In the D.C. area, another builder is no longer operating with sales caps.

Meanwhile, housing starts reached a 1.68 million annual rate in November, the most houses under construction in a single month since 1974. Yet a record 152,000 houses have been permitted but not yet started -- that's more than double the normal level. Builders are probably waiting to start some houses until they have a firmer grasp on prices, housing blogger Bill McBride suspects.

All this is taking place against a backdrop of supply chain issues, a dearth of building lots and a labor shortage. Any buyers venturing into today's new home market should expect their houses to take longer to build and contain more cosmetic defects than usual.

Oh, yeah -- and higher prices. Prices jumped anywhere from 17% to 19% in the 12-month period ending on Oct. 31, depending on whose report you read.

The lack of building sites and workers has been covered in this column and elsewhere for months. But to bring the situation up to date, lot availability is at a multidecade low, reports Robert Dietz, the National Association of Home Builders' chief economist. And the construction business has more than 410,000 open positions.

In its latest survey, 76% of its members said the supply of available lots was either low or very low -- an all-time record "by a wide margin" since the NAHB started collecting this data in the 1990s.

The NAHB also reports that more than half its builder-members need help in 16 different trades, with 9 out of 10 experiencing a dearth of carpenter subcontractors. Remodelers, who tend to have their own staffs as opposed to hiring subcontractors, are facing the same, with 4 out of 5 saying carpenters and concrete workers are impossible to find.

In another Burns survey, the consulting firm reported these comments from its clients: "Struggling to fill entry-level manual labor positions"; "Truck drivers are extremely hard to find"; "Difficult to find employees of both truss design and production," and "Assembly and plant-based positions are the toughest to fill."

Dietz expects the industry's skilled-labor shortfall to grow as builders start more houses. Indeed, he says the shortage will likely emerge as the chief industry challenge once supply chain issues ease. And those don't look like they're going away anytime soon. Already, upwards of 120,000 houses are in various stages of completion, many sitting idle while their builders wait for parts, according to one report.

Like most of his colleagues, Idaho custom homebuilder Steve Martinez cannot obtain the necessary materials to complete several houses. He recently told a panel of lawmakers his unfinished houses are just sitting there "with nothing going on, accruing interest and deteriorating quality."

It's costing not just him, but his subscontractors, suppliers and buyers thousands, he said.

"This isn't money that is going into upgrades or amenities," said Martinez, but rather "to build the exact same house they thought they were getting when we signed contracts."

Dietz reports that supply chain issues are impacting everything from appliances to vinyl siding, "including the kitchen sink."

As a result, says Janet Benavidez of Shea Homes, houses that normally take six to eight months to build now take 10 to 12 months -- or more. Even workarounds, like temporarily subbing appliances, aren't helping. "We're trying to find solutions," she says, "but many of our products are still sitting on ships."

The upshot is that by November, building material prices year-to-date had jumped 14.1%, more than tripling the increase for the same period in 2020, reports another NAHB economist, David Logan.

And it's not just lumber. Since August 2020, prices for steel products are up 151%, with 80% of that increase taking place in 2021. Ready-mix concrete rose 6.6% in the first 11 months of 2021 -- the largest year-to-date jump in November since 2005.

The cost for gypsum products dipped a tad in November, but prices had already climbed 18.8% up to that point. Even the prices for paint -- aka "architectural coatings," in the monthly Producer Price Index report released by the Bureau of Labor Statistics -- is up an unprecedented 16.7% for exterior paint and 10.9% for interior coatings.

The end result: The inventory of completed houses that have yet to find a buyer is just above the record low of 33,000, McBride reports, and about half the normal level. And Zillow says the shortfall of houses -- that is, the number of houses builders have not built since the Great Recession, even though the demand was there -- is something on the order of 1.35 million in the nation's 35 largest markets.

"This isn't a new boom cycle of construction" so much as what's needed "to get even from the last bust," says Zillow economist Jeff Tucker. "There is still a long way to go to catch up from more than a decade of slow construction, and some markets have longer to go than others."

Why is it that rookie agents who just received their licenses are able to charge the same fees as their colleagues -- many of whom have decades of experience and have closed hundreds of deals?

Why is it that agents who bust their butts -- not to mention, spend a ton of money -- to market a property for sale are paid the same as glorified chauffeur-agents who do little more than drive you from house to house until you find one that titillates your heartstrings?

It's because the real estate commission rates are just one step below fixed, according to a new report from the Consumer Federation of America.

The study of more than 10,000 sales in the eastern United States found that agent commissions are "highly uniform." But while stopping just short of saying rates are fixed, the report's author, Stephen Brobeck, told reporters during a telephone news conference that "if rates are all similar, clearly there is price setting going on."

Commissions are supposed to be negotiable, and technically, they are. But only to a small degree. In another CFA report two years ago, Brobeck found that only 1 in 4 agents were willing to bargain with their clients. The rest -- 75% -- essentially said, "No way -- this is what we charge; take it or leave it."

"The current commission system is designed to thwart price competition among agents," Brobeck says.

That seems to be the case in most of the 21 cities analyzed by the consumer watchdog group. In all but one -- Brooklyn being the lone outlier -- the sales fee taken by buy-side agents ranged between 2.5% and 3%. Only in Chicago, Indianapolis and New Orleans did a significant minority of agents charge less than 2.5%.

But in eight cities -- Atlanta; Baltimore; Columbus, Ohio; Grand Rapids, Michigan; Hartford, Connecticut; Roanoke, Virginia; Memphis; and Minneapolis -- 80% or more of the sales were charged identical rates. In Grand Rapids, a staggering 95.8% of the buy-side agents were paid the same rate.

Most buyers don't know how the agent who helped find their new house is compensated. And most don't care. If asked, agents say they're paid by the seller. And that's often good enough for the buyers.

But it is important to understand how commissions work. Typically, the seller's agent lists the house at a set fee, usually between 5% and 6% of the sales price. If the listing agent also secures the buyer, they keep the entire charge. But if another agent brings the buyer to the table, the commission is split -- generally down the middle.

Buyers and sellers pay about $100 billion a year in commissions. But Brobeck is convinced that if the fees are paid separately, that figure could eventually slip by $20 billion to $30 billion.

Recently, the National Association of Realtors adopted a new policy that allows -- but does not require -- listing agents to publish on their websites the share of the commissions that are paid to buy-side agents. The idea is to prevent buy-siders from claiming their services are free.

But Brobeck wants to go further by uncoupling commissions so that sellers pay their agents and buyers pay theirs. And others seem to agree: Both the Cato Institute and the Brookings Institution have published studies arguing for untying the fees.

The NAR's new rule "will help consumers," Brobeck says, but only to a small degree, because it only tells them how commissions are split. Going further and actually uncoupling the charges would spur greater rate competition, he argues.

Buy-side agent compensation is currently "baked into" the listing contract -- and, since many sellers add the agent's commission into their sales prices, into the cost of the house itself. Under a new system, it "would instead be negotiated by buyers," the report says.

"The only effective way to prod price competition is to uncouple," Brobeck explains. It would free agents "from the shackles of current industry rules" that force them to charge typical rates, and eventually there would be "a much wider" variation in not only rates, but also service options that reflect an agent's experience and the amount of effort they are willing to exert.

And, over time, the fees would decline, Brobeck believes -- for both sellers and buyers. With uncoupling, he thinks the commission on a house listed for $380,000 -- the average list price in October, according to Realtor.com -- could eventually fall by as much as 2 full percentage points. That means the total commission would drop from $20,900 to $13,300: a reduction of $7,600 that would be shared equally by seller and buyer.

That would mean, though, that at a time when many buyers are struggling to come up with a down payment, they would need even more cash to close because they'd have to pay their agents from their own funds.

But Brobeck scoffs at that argument, saying because sellers tend to pack their selling costs into their asking prices, buyers "won't pay any more in gross." And since the extra cost is typically mortgaged along with house itself, they won't be paying interest on their share of the sales commission for 30 years, either.

Still, the NAR said in a statement that forcing buyers to take on the additional out-of-pocket expense "would cause added financial hardship and could freeze out many from the market entirely, particularly first-time and low- and middle-income buyers. It could also force buyers to forgo professional help during what is likely the most complex and consequential transaction they'll make in their lifetime," the statement claimed.

But Brobeck says that if untied, commission rates would tumble, and discount agents who offer a choice of services based on their abilities would flourish.

"In my mind," he says, "there's no issue at all."