Last spring, a family in Chappaqua, New York, listed their home for $1.15 million. The median time on market in their area was about a week. Their house sat for months. Prospective buyers came, toured the rooms, and walked away. Every one of them had seen the same thing on Zillow: a flood risk score of nine out of ten. Extreme.
The property is not in a FEMA flood zone. It has never flooded. It does not require flood insurance. The family's lawsuit against Zillow alleges the score was inaccurate and cost them $100,000 when the house finally sold below asking. Their complaint describes "topographical and structural features that preclude a credible risk of flooding."
Set aside the legal merits. Look at what happened next. On November 14, 2025, Zillow pulled its climate risk scores from every listing on its platform. The California Regional Multiple Listing Service, one of the largest MLS operators in the country, had pressured the company to remove the data. CRMLS CEO Art Carter said labeling a property with a specific flood probability "can significantly influence how desirable that home appears to potential buyers." Zillow, which depends on the MLS ecosystem for listing data, complied. A spokesperson said the company acted to meet "varying requirements" of a major aggregator.
A family lost six figures because a listing platform displayed climate risk data. The system's response was to remove the information.
Think about who that removal protects and who it exposes. An NRDC-commissioned actuarial analysis by the firm Milliman examined 25 states with inadequate flood disclosure requirements and found that thousands of people likely purchased previously flooded homes without ever being told. On average, those buyers faced tens of thousands of dollars in unexpected damage. A home that has flooded once is likely to flood again. The information existed somewhere in the system. It did not reach the person writing the check.
This Memorial Day weekend, across flood-risk zip codes where property values are quietly diverging from the national trend, families are walking through open houses. They are calculating mortgage payments, asking about the school district, imagining their kids in the backyard. The system that prices their flood risk knows exactly what it knows. The question is what it lets them see.
What the system calculates
FEMA's Risk Rating 2.0, implemented in 2021, represents the most significant overhaul of flood insurance pricing since the National Flood Insurance Program began in 1968. The old system sorted properties into broad risk categories based on flood zone maps. The new system calculates premiums based on each property's specific characteristics: distance to water, cost to rebuild, elevation, flood frequency, and multiple flood sources including rivers, rainfall, coastal storm surge.
Risk Rating 2.0 knows what flood risk actually costs. It can price it to the structure.
But Congress caps annual premium increases at 18% for primary residences. A property whose actuarially sound premium should be $4,000 but is currently priced at $825 will take years to reach its real rate. The GAO estimated it would take until 2037 for 95 percent of current policies to reach full-risk premiums, producing a $27 billion shortfall. Nine percent of policyholders will eventually face increases of more than 300 percent.
The program knows the price and is legally prohibited from charging it. A buyer who checks the current NFIP premium on a property sees a number that is, by design, lower than the risk warrants. The trajectory of that number over the next decade appears nowhere in the transaction.
Since Risk Rating 2.0's implementation, new NFIP policies have declined by roughly 11 to 39 percent, with renewals dropping 5 to 13 percent, depending on the size of the premium increase. The reductions are largest in lower-income areas. The families being priced out of coverage are the ones who can least afford to rebuild without it. They are also the families who bought in flood-risk areas because the NFIP's subsidized premiums made those neighborhoods look affordable in the first place. The program incentivized the decision. Now it's withdrawing the subsidy. The buyer at the open house this weekend doesn't know which phase of that withdrawal she's walking into.
What the appraiser is trained to ignore
The next node: the appraisal. The Uniform Standards of Professional Appraisal Practice govern every state-licensed appraiser performing work for federally related transactions. USPAP addresses ethics, competency, scope of work, and reporting. Its environmental guidance covers hazardous substances and contamination. There is no USPAP standard, advisory opinion, or rule requiring appraisers to analyze future flood risk trajectories, sea-level rise projections, or climate-driven hazard intensification.
The most recent advisory opinion from the Appraisal Standards Board, adopted April 23, 2026, addressed the use of artificial intelligence in appraisals. Climate. Flooding. These didn't make the agenda.
What happens when disclosure is mandated tells you something about the pressures operating on appraisers even when the rules change. A 2025 study in Real Estate Economics examined expanded flood disclosure requirements in South Carolina. Researchers found that when more comprehensive disclosures were required, home prices in areas with significant flood history actually increased. To support these higher valuations, appraisers reduced negative language in their reports, selected more comparable properties from outside flood zones, and applied smaller adjustments to comparable sales. Appraisal values matched or exceeded contract prices 89.2 percent of the time.
The system absorbed the transparency requirement and neutralized it. More disclosure produced more creative methodology for maintaining values. The lender wants the deal to close. The seller wants the price to hold. The appraiser works within standards that push in one direction, and it is toward telling a buyer her property is worth what she's paying for it, regardless of where the water will go.
What the lender checks and what it doesn't
The lender verifies whether a property falls within a FEMA Special Flood Hazard Area. If it does, flood insurance is required as a condition of the federally backed mortgage. The determination is binary: in the zone or out.
Two systems that should talk to each other operate in parallel silence. Flood zones are no longer used to calculate a property's premium under Risk Rating 2.0. Premiums are now based on property-specific features. But lenders still use the old FEMA maps for the mandatory purchase requirement. The map that determines whether you must buy insurance and the model that determines what that insurance will cost run on entirely different methodologies. A lender can require flood insurance based on a zone designation while having no obligation to communicate the premium trajectory that Risk Rating 2.0 has already calculated.
The buyer learns she needs flood insurance. She does not learn what that insurance will cost in five years.
The NFIP, carrying $22.5 billion in debt to the Treasury, has been reauthorized on a short-term basis 35 times since 2017. The current extension expires September 30, 2026. During past lapses, roughly 1,300 home closings per day were affected.
Whether this Congress will produce a 36th extension or allow another lapse is, as of today, unresolved. The buyer closing on a flood-zone property this summer is financing a 30-year commitment against a program that cannot commit to the next fiscal year.
What the seller may never have to mention
More than one-third of states have no statutory or regulatory requirement that a seller disclose a property's flood risks or past flood damages to a potential buyer. The trend line is moving. Florida enacted mandatory flood disclosure effective October 2024, then broadened it in 2025 to cover landlords, condominium developers, and mobile home park owners. New York and New Jersey moved from failing grades on NRDC's disclosure scorecard to an A. The number of states requiring landlords to disclose flood risk to renters has nearly tripled since 2017, from four to eleven.
But even where disclosure exists, the structural gaps persist. In certain states, sellers are only required to disclose their knowledge of past flood damage, creating room for plausible deniability. FEMA flood maps are not designed to capture pluvial flooding from heavy rainfall, drainage backups, or snowmelt. A property can flood repeatedly from causes the maps don't show. And research suggests many homebuyers don't consult disclosure forms when closing on a property, even when the forms exist.
What the agent knows and what the deal requires
The real estate agent sits at the point where institutional knowledge meets the buyer face-to-face. Agents in flood-prone markets know which streets take water. They know which neighborhoods have seen premiums spike. They know, because they watch deals fall apart over it, what Risk Rating 2.0 is doing to affordability.
A different set of forces shapes what they communicate. An agent's fiduciary duty varies by state and by whether they represent the buyer, the seller, or both. Disclosure obligations track the same patchwork as seller requirements. And the deal-completion incentive is structural: agents are compensated at closing. A buyer who walks away from a flood-risk property is a commission that doesn't materialize.
Carter, the CRMLS CEO who pressured Zillow, was explicit about the mechanism. Even small shifts in perceived risk, he said, "can alter interest and, eventually, pricing." An agent working on commission has every reason to manage exactly that. The MLS systems that agents depend on for listings are the same systems that pressured platforms to remove climate data. The information environment the agent operates in has been shaped, upstream, by the industry's own trade infrastructure.
Individual agents can operate in complete good faith and the outcome holds. The structural incentives point away from volunteering information that kills deals, in a profession where no standard of practice requires climate risk competency and where the MLS ecosystem has actively worked to reduce the visibility of the data.
What the platform built and then buried
Zillow again. When the company launched climate risk scores in 2024, its chief economist said the quiet part clearly: "Healthy markets are ones where buyers and sellers have access to all relevant data for their decisions."
Redfin had already tested this proposition. In 2020, the company ran an experiment with 17.5 million users, displaying First Street flood risk data to half the audience. Among users looking at severely or extremely flood-risky homes, those who saw the risk scores made offers on homes with 50 percent less risk than those who didn't. Information changed behavior. The real estate industry saw it happen.
CRMLS didn't just pressure Zillow. Carter's group also asked Realtor.com, Redfin, and Homes.com to remove First Street's predictive scores and flood layer maps. Redfin refused. Its chief economist Daryl Fairweather responded:
"We believe the default should be transparency. Ignorance isn't bliss when it comes to your biggest asset."
Realtor.com, which has hosted First Street scores since 2020, said it was "working with CRMLS and our data providers to look into the issues surfaced."
First Street CEO Matthew Eby noted the timing. The pressure to remove climate data "didn't arise when housing markets were roaring and inventory was plentiful. It's happening now, during one of the toughest real-estate environments in decades."
There is a legitimate accuracy question underneath the industry pushback. A UK Climate Financial Risk Forum study examined how 13 different climate-risk companies rated the same 100 properties worldwide. The ratings diverged wildly. Bloomberg compared First Street's flood model with one from UC Irvine researchers and found they matched just 21 percent of the time. The Chappaqua family may be right that their score was misleading. First Street's scores measure exposure, not damage. A house surrounded by two feet of floodwater but elevated three feet above it would show extreme exposure and zero damage.
But the system's answer to imperfect information was no information. What remains on Zillow is a link to First Street data, buried deeper in the listing. The scores that cost the Chappaqua family a sale are gone. The risk that generated those scores has not moved.
The Casten deadline
In April 2026, Representative Sean Casten sent letters to the CEOs of Zillow, Rocket Companies, Move Inc., CoStar Group, Compass, CRMLS, and the Council of Multiple Listing Services. The letter states that "American consumers are increasingly exposed to climate-related risks in the housing market, including from high immediate insurance costs that often do not become apparent until late in the home-buying process."
Four questions, due June 1. Five days from now. Is your company committed to providing homebuyers with the best available climate risk information? What data sources do you rely on? How is the information conveyed? What feedback have you observed?
As of today, no public responses have appeared. CRMLS, which pressured Zillow into removing its scores, is among the recipients.
Meanwhile, the market is already sorting itself without the buyers' knowledge. ICE mortgage data shows that homes with high flood risk have appreciated at roughly 0.3 percentage points less per year than comparable homes with no flood risk. Over a decade of strong appreciation, that gap was masked by rising prices everywhere. In a softening market, it won't be. Longer-term flood and hurricane risk is associated with delinquency rates more than 30 percent higher than in areas with negligible risk. Institutional investors can see this divergence. Reinsurers can see it. The family at the open house cannot.
The architecture of omission
One more pass through the chain. FEMA calculates the real cost. Congress caps the signal. The appraiser works under standards that don't require climate analysis and, when disclosure is mandated, may adjust methodology to maintain values. The lender checks a map built on a different methodology than the pricing model. The seller, in a third of states, has no obligation to mention that the basement flooded twice. The agent operates in a compensation structure and information environment that discourage volunteering what kills deals. The listing platform built a tool that worked, watched it change buyer behavior, and removed it under industry pressure.
Every link holds information relevant to the biggest financial decision of a family's life. Every link, for its own structural reasons, does not pass it along.
Every institution in the chain is performing as built. It was built for a housing market where flood risk was stable enough to be averaged away, where a 100-year floodplain was a meaningful concept, where the distance between a FEMA map and an actuarial model was small enough not to matter. None of those conditions hold.
I keep thinking about who absorbs the cost of that gap. The Chappaqua family lost $100,000 because one node in the chain briefly worked. The deeper exposure falls on the family stretching for a down payment in a neighborhood that's affordable precisely because the risk hasn't been priced yet. The family that moved inland from the coast because premiums got too high, only to discover the inland property floods from rainfall the maps don't capture. The thousands of buyers the Milliman analysis found across 25 states who purchased previously flooded homes and were never told. The scores that cost the Chappaqua family a sale were the same scores that, according to Redfin's experiment, helped 17.5 million users make better decisions about where to live. The chain's response was to shut down the node.
As First Street's Eby put it:
"The risk doesn't go away; it just moves from a pre-purchase decision into a post-purchase liability."
Post-purchase liability lands on a person. It lands on the family that chose the neighborhood because it was what they could afford, that trusted the system's silence to mean safety. The chain knows what it knows. The family at the open house this weekend knows what the chain lets them see. The distance between those two facts is where the cost will come due, and it will not be distributed evenly.
- NFIP's September cliff: The National Flood Insurance Program expires September 30, 2026, and a GAO report from March found FEMA has implemented only four of nine recommendations for reducing the program's fiscal exposure while addressing affordability.
- Casten letter responses due: The June 1 deadline for Zillow, CRMLS, and five other real estate companies to answer Casten's four questions on climate risk disclosure will reveal whether the industry treats buyer transparency as a commitment or a liability.
- Flood risk and delinquency: ICE mortgage data shows loans on high-flood-risk properties carry roughly 40 percent higher severe delinquency probability, a divergence that has been masked by a decade of appreciation but could surface fast in a softening market.
- State disclosure momentum: Florida's broadened flood disclosure law, effective October 2025, now covers landlords, condo developers, and mobile home park owners, and similar reforms in New York and New Jersey suggest a national trend worth tracking against the one-third of states that still require nothing.