Across the country, Americans are second-guessing big purchases, dialing back on long-term dreams, and even downgrading essential protections like insurance. The rising cost of living and fears of a looming recession are making many feel like they’re walking a financial tightrope. To better understand the current situation, we surveyed 1,000 Americans about how economic stress is affecting their approach to home buying, car ownership, and insurance coverage.
Key Takeaways
- 35% of Americans have delayed or canceled plans for a big purchase this year, including a home (22%), a car (8%), or both (5%).
- More than 1 in 10 (12%) have downsized their “dream home” goals due to inflation.
- Nearly 1 in 4 (24%) have downgraded or dropped insurance to free up cash.
- 1 in 3 would go without insurance coverage temporarily to free up funds for necessities.
Economic Anxiety and Major Life Decisions
With inflation, high interest rates, and recession fears looming large, some Americans are putting off major financial milestones.
More than a third of Americans (35%) postponed buying a home or car this year, with millennials (40%) and Gen Z (32%) being the most likely to delay or cancel these purchases. Over half of Americans (63%) said economic uncertainty was the main reason why. Many also pointed to high interest rates (57%) and prices (55%).
Among all respondents, 22% put off buying a home, 8% delayed purchasing a car, and 5% hit pause on both. In addition, 1 in 4 now believes renting is a smarter financial move than buying in 2025. Millennials were the most likely generation to put car (24%) and home (10%) purchases on hold.
Inflation has also chipped away at homeownership goals, with 12% saying they’ve downsized their idea of a “dream home.” And when it comes to buying a first home, age expectations are rising. Gen Z renters expect to afford their first home by age 33, while millennials have pushed their expectations to age 44.
Cutting Costs by Downgrading Essential Protections
When money’s tight, even the basics can feel like luxuries, and insurance is one area where some Americans are taking risks.
On average, Americans pay $169 for home insurance and $189 for car insurance per month. During times of economic uncertainty, these recurring costs can feel overwhelming. Nearly 1 in 4 (24%) said they’ve reduced covered for a home or car in the past to save money.
In the last year, 29% have downgraded or canceled some type of insurance coverage. The most common cut was car insurance, with 15% scaling back. Among those downgrading car insurance, 8% went from full coverage to liability only, leaving them more financially exposed in the event of an accident.
These decisions often come from a place of worry and financial strain. The top concerns weighing on Americans’ minds were the possibility of unexpected expenses (36%) and losing a job or main source of income (31%). For some, reducing coverage is a way to create breathing room in the budget, even if it means taking on more risk in the long run.
Navigating Insurance in Uncertain Times
Americans are feeling financially strained, and they’re also rethinking how they view and prioritize insurance. For some, rising premiums and everyday costs have sparked tough choices about which protections to maintain.
A third of Americans said they would temporarily go without insurance to cover essential expenses, while 1 in 5 would consider opting out of coverage if premiums kept rising. Financial pressures could lead to difficult trade-offs as people prioritize immediate needs.
Still, most Americans continue to see insurance as a critical safety net. While only 37% of respondents said they fully trust insurance companies to help when something goes wrong, the value of coverage remains clear. Car insurance was viewed as essential by 77% of Americans, and 57% said the same for renters or homeowners insurance.
Staying Protected When Budgets Are Tight
As Americans navigate high prices and economic uncertainty, they’re making tough choices that could carry long-term consequences. Big dreams like homeownership are being delayed or downsized, and essential protections like insurance are being downgraded or dropped.
If you’re feeling the pressure, know you’re not alone. But before skipping coverage or canceling a policy, consider talking with a trusted insurance advisor about flexible options. Many providers offer discounts or modified plans that keep you protected without overextending your budget. After all, the goal isn’t just to weather today’s storm, but to stay secure for whatever comes next.
Methodology
We surveyed 1,000 Americans to explore how the economy is impacting major life purchases. Of the respondents, 17% were Gen Z, 48% were millennials, 25% were Gen X, and 9% were baby boomers. Due to rounding, the percentages in this study may not total 100.
About Guardian Service
Guardian Service makes shopping for auto and home insurance easier, more affordable, and less stressful. With a customer-first approach, we help families protect what matters most while keeping the process simple and transparent.
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