Report Findings: Wildfires threaten U.S. real estate and homeownership.

Climate fires caused by climate change are costing the U.S. economy between $394 billion and $893 billion year after year, a new congressional report shows - a startling figure that is twice as high as previous government estimates.

The new report from the Joint Economic Committee, chaired by Democratic Sen. Martin Heinrich of New Mexico, examines a wide range of costs beyond direct fire damage, including impacts on property values, premature deaths and health risks from wildfire smoke, watershed threats and lost revenue. The report was reported first by CNN.

The range of costs identified by Heinrich's committee and adjusted for inflation is significantly higher than the Trump administration's report, which looked at fewer impacts and estimated the annual cost of the fires to be between $87.4 billion and $427.8 billion. "The overall numbers are frightening," Heinrich told CNN. "Even if you live in a place where fires have never been a problem, these numbers are big enough to be systemic problems for the economy. "

Heinrich said he and his staff wanted to study the cascading economic costs of fires, including effects that continue long after the fire is extinguished, and argue why lawmakers and officials should spend money up front on resiliency measures. "Some politicians have always had the attitude that we can't afford to do anything about climate change," Heinrich said. "And the real cost to our economy is to do nothing and allow an even worse outcome in the future. "

The decline in U.S. real estate values is the biggest part of the overall cost. The report estimates that fires cause property values to drop between $67.5 billion and $337.5 billion each year. In comparison, the report estimates insurance payments for fire damage at $14.8 billion a year, with annual premium growth of about $1.6 billion. However, the accuracy of these figures is also uncertain, as the impact on the real estate market is only beginning to be understood, one expert said. "There's a lot of uncertainty, it's true," said Ed Kearns, chief data officer at the nonprofit First Street Foundation, who was not involved in the report. "This is still evolving as the insurance industry ramps up adjustments.

Emergency experts are warning that the U.S. is on the verge of serious economic consequences due to wildfires and real estate. In fire-prone California, home insurance prices are skyrocketing and several insurance companies have stopped writing new policies, citing more devastating fires. There is also evidence that the emerging insurance crisis has already affected real estate prices, said David Jones, a former California insurance commissioner and director of the Climate Risk Initiative at the Center for Law, Energy and the Environment at the University of California Berkeley's Center for Law, Energy and the Environment. Homeowners who had to pay a higher insurance premium may have a harder time selling their home. Buyers also have to factor rising insurance premiums into their monthly payment, which reduces the amount available to them to buy a property - if, of course, they can get a policy at all. "If you're a buyer, you're going to question how much it's going to cost me to insure this place and if I can get it," Jones said. Since insurance is really expensive and hard to get, he added: "then homebuyers say, 'I'm not going to pay that amount for a house because it's just not worth it'." Kearns agreed, saying federal lending giants Fannie Mae and Freddie Mac are starting to take notice of some insurance companies in California that are removing fire coverage from their policies or not writing new policies at all. "They just weren't on their radar; the flooding was the primary cause of the default," Kearns said. "After the insurance companies cut loose, Fannie Mae and Freddie Mac had a change of heart. "

The congressional report also looks at the impact of the fires on drinking water - something that was not measured in the previous federal report, but becomes even more important as the West faces a drier future. In recent years, fires have polluted adjacent streams and rivers that provide water to communities, leaving some at risk of running out of drinking water. Last year, a massive fire in northern New Mexico left behind ash and burned soil that rolled into the Gallinas River, threatening the water supply for the city of Las Vegas, New Mexico. Faced with only a few weeks of fresh water before they found an additional source, city officials were hoping for federal grants to upgrade their water treatment system to remove tiny particles of contamination and ensure safe drinking water. Heinrich said the hydro costs found by the report were "very significant." "Communities like Mora and Las Vegas, which had to develop ways to provide clean drinking water for their constituents after the fire, realize how expensive clean water is and how dependent it is on infrastructure," Heinrich said.