October 2025
What’s the impact of natural disasters on local economies?
Natural disasters impede economic growth, particularly for small businesses and households in more vulnerable communities.
Key takeaways
- In 2024, the U.S. saw 90 major disaster declarations from the Federal Emergency Management Agency (FEMA) — nearly double the 30-year average of 55. These events affected roughly 41% of the population and have caused over $2.9 trillion in damages since 1980.
- According to a Bank of America proprietary survey, insurance premiums rose by an average of $921 annually for those affected by natural disasters. The associated increase in insurance costs could change which areas homebuyers consider affordable or desirable.
- Natural disasters can accelerate financial instability as well as impede economic recovery, particularly for small businesses and households in more vulnerable communities. Following Hurricane Helene and the LA wildfires, spending on home improvement and lodging rose sharply in affected areas, according to Bank of America aggregated card data, forcing people to spend on rebuilding and therefore constraining household budgets.
Read our full analysis for a more in-depth look at these trends.
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