North Carolina has a long-standing reputation for being one of the most affordable states on the coast. As markets grow, though, they change, and while many parts of the state are still very affordable, there are some areas that are growing out of the bracket of “affordability”. Homeowners in the Tar Heel State face rising insurance rates, surging property taxes, and reduced affordability for everyday expenses like food, health care, and utilities. This has led to more pressure on household budgets, and for many families, this is a big change. The cost of living in early 2026 is now closer to the national average cost of living index than just a few years ago.
This is critically important for households on a fixed or modest income. With that in mind, we’ve put this guide together to help break down how these costs are impacting housing decisions. You’ll see how even small changes move the needle on long-term plans. Just knowing where these elevated costs come from can help homeowners figure out if they should stay put or find a location with a standard of living they want.
The “Insurance Crisis”: Why Coastal NC Rates Are Jumping 16%
Insurance costs have become one of the fastest-growing pieces of the cost of living in North Carolina, especially near the coast. Communities close to the Outer Banks, Carolina Beach, and other shoreline areas face a higher risk tied to hurricanes and severe storms. Events like Hurricane Helene keep insurers cautious, which leads to higher premiums for homeowners.
These growing expenses aren’t just changing life for coastal residents. Insurance companies try to spread risk across wider regions, which pushes rates higher even for those living further inland. Homeowners who haven’t filed any claims still see their monthly costs rise. Those increases are going directly into the mortgage payments and general housing expenses.
As prices continue to climb, the wider housing market feels it and adjusts to accommodate. Buyers factor insurance into affordability. Sellers then feel pressure to lower prices, but long-term residents question if the math still makes sense.
Did You Receive a “Consent to Rate” Letter? (Don’t Ignore It)
Consent to Rate letters are critical, and many North Carolina homeowners don’t even know what they are. If you receive a “Consent to Rate” letter from your insurer, your response can determine your insurance rates. These notices have to be mailed to homeowners to explain proposed rate increases.
They give you a short window within which you can respond, or look for other insurance companies. Ignoring this letter and the potential rate increases can end up locking you into higher premiums, which puts a lot of pressure on household budgets.
Tax Revaluations: Why Your Tax Bill Might Explode
Property tax revaluations are a big deal in North Carolina, and they’re behind a big slice of the cost-of-living pie. Each county periodically reassesses property values, and if those values have grown faster than income, it can mean a tax bill that’s difficult to pay. Counties that have seen more substantial rate growth, like Wake County, Durham County, and Johnston County, have all seen their assessments spike. When the assessments grow, so do property taxes, even if there haven’t been improvements to the home in the meantime.
In most cases, it’s not even the new tax rate or the bottom line of the resulting tax bill. For most homeowners, the biggest challenge is the growing gap between the assessed value and the household income. When the wage growth doesn’t keep pace with tax increases, overall affordability diminishes fast.
The “Landlord Trap”: Why Rental Property Insurance is Up 60%
Rising insurance costs aren’t just going up for your house, they’re up for rental properties as well. Landlords across the state are being forced to pay more to properly insure rental homes. This means as much as a 60% increase in properties in high storm risk zones or coastal areas. Increases like this aren’t just absorbed by the owner, they’re eventually passed down to or subsidized by the tenant. This is one of the reasons that rent prices seem to keep going up even once home values have reached a plateau.
Renters can feel cost of living pressure even more than owners. Particularly when those renters are families trying to live within living wage thresholds or poverty guidelines. When monthly rental prices climb, it becomes more cost-effective for some households to consider buying. Others seek out smaller properties or move further from job opportunities to capitalize on lower costs. This eventually means a tighter regional market that drives up prices for everyone. Even with a great place to live, that’s not an ideal outcome.
Energy Rate Hikes: The Cost of Cooling a Home in NC
No matter where you live in North Carolina, you need AC. Our summers are hot and humid, and there’s no escaping them. This puts a quiet, persistent strain on HVAC bills. As energy costs get higher each year, it means cooling a home costs more and more, year after year. Whether the property is well inland or right on the beach, rising utility bills are another straw on the camel’s back. They add growing amounts to monthly expenses, while reducing flexibility, when budgets are already tighter than in previous years. Any cost-of-living or living wage calculator on the internet will tell you that’s going to hit a tipping point eventually.
Maintenance Inflation: Why “Deferred Maintenance” Devalues Your Home
Maintenance costs in North Carolina have risen alongside inflation, and that hits homeowners with older properties the hardest. Materials, labor, and specialized repairs all cost more, which makes routine upkeep harder to keep up with. Small issues like roof wear, moisture intrusion, or aging HVAC systems don’t stay small for long when they get ignored.
Deferred maintenance also drags down home values. Buyers notice visible wear right away and factor repair risks into their offers. If repairs are piling up, they increase the cost of living in that house, even when the mortgage, utilities, insurance, and everything else may be level.
Income Tax Cuts vs. Fixed Costs: Why You Still Feel Poorer
State income tax changes get a lot of attention, but they don’t always translate into relief for households. Fixed costs like insurance, property tax, child care, health care, and utilities keep rising regardless of tax policy or per capita income. For many families, especially ones near poverty wage, those increases eat up any savings quickly.
Living wage estimates show the gap clearly. Minimum wage and typical hourly wage levels don’t always align with real monthly expenses, especially for a family of four. Food and groceries, internet & mobile service, car insurance, and miscellaneous expenses add pressure that doesn’t show up in headline numbers.
That’s why many homeowners feel their standard of living slipping even when gross income hasn’t changed much. The cost of living problem isn’t one bill. It’s the accumulation of many unavoidable ones.
Renting vs. Owning: Math for the Wilmington Retiree
Retirees and other households with modest or fixed incomes often decide on renting versus buying based largely on predictability. The same applies to those making minimum wage or an hourly wage below the national average. Renting and owning both offer a degree of stability, just in different ways.
Renting offers monthly rent payments that are stable for a year at a time. There are also fewer surprises tied to changes in insurance or repairs. Rent prices tend to increase each year, but in predictable, often capped amounts.
Renting can often be easier for retirees to plan for the long term. Owning can still make sense in some areas, though it comes with some caveats. Mortgage payments are stable, but property taxes and maintenance aren’t.
Before downsizing and making their move, many homeowners look at selling their home to unlock equity. When you sell by owner, you cut out commissions, but you still have to do all the work of listing and marketing. A faster alternative is a direct sale with a cash buyer, which can cut the process down to a couple of weeks while maximizing your net proceeds.
How Selling “As-Is” to ILM Home Offer Solves the Insurance Problem
For homeowners facing rising insurance premiums, selling as-is can remove one of the most substantial cost-of-living stressors almost immediately. Keeping a home insured in North Carolina has become more expensive each year, especially in coastal and storm-exposed areas. When insurance costs and the inflation rate jump faster than income, holding onto a property can start to feel unsustainable.
Selling to ILM Home Offer lets you skip the repairs, inspections, and long listing timelines that keep insurance active and expensive. Instead of carrying coverage while waiting for a buyer, North Carolina sellers can move quickly and convert home equity into cash. That liquidity can help cover moving expenses or support a transition to a lower-cost area.
A cash sale option is critical for homeowners in places like Leland or Burgaw, where insurance hikes and maintenance costs often collide at the same time. A fast, as-is sale reduces exposure to rising premiums and gives sellers control over timing in your North Carolina home sale.
Conclusion
The cost of living in North Carolina continues to grow, and homeowners feel that impact first. With almost every aspect of property ownership now costing more, the cost of staying in a home is radically different from what it was only a few years back. Even getting saddled with only modest increases can mean drastic changes in core affordability if income stays flat.
For some homeowners, getting a clear grasp of these costs makes it easier to plan ahead. But for others, it means downsizing and selling as soon as possible. The right choice for you will depend on individual finances, timing, and clarity in long-term goals. If you’re thinking about your options, ILM Home Offer may be able to help. Reach out today, and get a fair cash offer that can unlock the equity you need to start a new chapter.