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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 68 April 2025 J O U R N A L they received in premiums each year since 2020. In 2023, industry losses were 10.5%, the highest in over a decade. As a result, many carriers have increased their premiums consider- ably. From 2020 to 2023, premiums have increased by 33%, rising to $2,530 annually on average, according to a recent NBER study. But even those higher premiums don't yet accurately ref lect current risk levels due to various regulations in the insurance industry. CONSUMERS DELAY LIFE PLANS AMID INFLATION PRESSURES A s inf lation continues to shape consumer behavior, Americans are adjusting their financial habits, delaying major life plans, and seeking new ways to manage their money. According to the second annual Wells Fargo Money Study, 76% of Americans have cut back on spending, a notable increase from 67% in 2024. The impact is even more pronounced among younger gener- ations, with 82% of Gen Z adults and 79% of millennials reporting reduced spending. Even among teens, 60% say they are spending less in response to economic conditions. "Consumer behaviors are shifting. The value of the dollar and what it is providing may not be as predictable anymore, which seems to be more pro- nounced for younger Americans," said Michael Liersch, Head of Advice and Planning at Wells Fargo. Financial Trade-Offs: Life Plans Put on Hold With higher prices stretching household budgets, 60% of Americans say they are making tough financial choices, and 55% report delaying major life plans. Among those postponing milestones: • 74% have delayed travel plans • 39% have postponed home renova- tions • 30% have delayed moving or purchas- ing a home • 17% have put off further education • 14% have delayed marriage • 13% have postponed retirement The study underscores the reality that many households are struggling to balance financial goals with the rising cost of living. Sticker Shock: Prices Far Higher Than Expected A major driver of these shifting be- haviors is continued sticker shock, with 90% of Americans reporting surprise at the cost of common expenses like din- ing out, event tickets, and even bottled water. Actual prices are often 55% to 200% higher than expected. • Dining out: Expected cost $23, actual cost $40 (74% higher) • Gas: Expected cost $40, actual cost $62 (55% higher) • Concert/sporting event tickets: Expected cost $70, actual cost $150 (114% higher) • Bottle of water: Expected cost $1, actual cost $3 (200% higher) • Greeting card: Expected cost $3, actual cost $6 (100% higher) • Video game download/streaming service: Expected cost $20, actual cost $50 (150% higher) "Spending is one of the most import- ant factors to staying on track with your goals," Liersch said. "I would encourage people to continue to evaluate their fi- nancial choices and align their spending with what matters most to them." Americans Want to Learn Better Money Management Despite financial strain, Americans are taking a proactive approach to im- proving their financial habits. As well as wanting to learn new money behav- iors, 86% specifically mention wanting to be more thoughtful and intentional about their spending. "These insights highlight that Amer- icans are not just winging it. They are being extraordinarily introspective and thoughtful as they navigate their finan- cial priorities and work toward achieving their financial goals," Liersch said.