Wildfires are now costing the US up to $900 billion annually

A new report estimates that $338 billion of the cost is in diminished home values

By Clarisa Diaz1 min readUpdated October 17, 2023

Wildfires are costing the US economy between $394 billion and $893 billion each year, according to a new report by Joint Economic Committee Democrats. The committee found the highest cost to the economy is loss of real estate value—with $337.5 billion going up in smoke in the last year—further pinching supply for those looking to become homeowners or seeking housing. Mitigating exposure to wildfire smoke is the next biggest cost at $202.5 billion per year. The report findings explore the downwind effects of a wildfire, not just the wildfire itself. For instance, income loss is a result of people losing homes or workplaces due to wildfires—estimated at $147.5 billion per year.

Costs are more than what the US government spends

The total cost of wildfires on the US economy is greater than the budgets of many government departments. The US government spends roughly $866 billion per year on income security, $766 billion on national defense, and $677 billion on education and social services—all of which are lower than what wildfires can cost the country. On the high end, the cost of wildfires is almost equivalent to the government’s annual budget for healthcare, according to data from the Peter G. Peterson Foundation.

The US Department of the Interior oversees the country’s wildfire management budget, which is $1.77 billion for 2023. The budget has gradually increased since 2020, when the wildfire management budget was just $952 million. The department has requested $1.94 billion to manage wildfires in 2024. Additionally, the US Forest Service earmarks around $2 billion (pdf) annually for wildfire management. But the combined budgets are only a fraction of the total costs caused by wildfires.

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