Latest / Wages and Prices with Fexingo: Cost of Living, Pay Raises, and Workers' Purchasing Power / How Your Raise Is Finally Beating the Cost of Homeowners Insurance
Transcript
- Lucas: Luna, I want to talk about something that hits a lot of homeowners right in the gut: insurance premiums. For years, the cost of insuring your home has been climbing way faster than paychecks. Luna: It's one of those bills you can't really shop your way out of either. You need coverage, and the price just keeps going up. Lucas: Exactly. But here's the thing — if you look at the latest data from June 2026, something interesting is happening. Average hourly earnings for private workers hit thirty-seven dollars and sixty cents. That's up about three-point-two percent from a year ago. Luna: And homeowners insurance? I've seen numbers that it was rising at four or five percent annually not long ago. Lucas: Right. But the most recent reading shows the increase moderated to about two-point-eight percent year-over-year as of May 2026. So for the first time in a while, wage growth is actually outpacing that specific cost. Luna: That's a real win for household budgets. But I'm curious — why did insurance get so expensive in the first place? And why is it cooling now? Lucas: Great questions. First, the drivers on the way up. A lot of it comes down to climate losses. Wildfires, hurricanes, severe storms — they've been getting worse, and insurers have been paying out more. That pushes up premiums for everyone. Luna: Plus reinsurance costs. The big insurers that backstop the primary insurers have been hiking their rates too. Lucas: Exactly. Reinsurance prices shot up after several catastrophic loss years. And then you have state-level factors — some states like California and Florida have seen insurers pull back or non-renew policies, which tightens supply and drives up prices. Luna: So what changed recently to bring the increase down to 2.8 percent? Lucas: A few things. First, catastrophe losses have been a bit quieter over the past twelve months — not gone, but not as extreme. That takes some pressure off. Second, insurers have already done a lot of repricing. They front-loaded big hikes in 2023 and 2024. Now they're adjusting more modestly. Luna: So the catch-up is mostly done, in other words. Lucas: That's the read. And on the wage side, even though the labor market is cooling — the June jobs report showed only fifty-seven thousand new payrolls and unemployment at four-point-two percent — wages are still rising at a decent clip. That combination is finally giving workers a bit of breathing room on this front. Luna: It's a reminder that real wage growth — your raise after adjusting for inflation — depends on which costs you look at. Some categories like insurance are finally becoming more manageable. Lucas: That's exactly it. And if this kind of breakdown is useful to you, it's worth knowing how these episodes stay on the air without ads. It's listener supported. You can find us at buy me a coffee dot com slash fexingo. Luna: Yeah, it's a small way to keep the conversation going. And honestly, we love doing it. Lucas: So back to the data — the broader point is that real wage gains are starting to show up in more places. But the picture isn't uniform. Some costs, like rent, are still sticky. Others, like homeowners insurance, are turning a corner. Luna: What about other insurance types — auto, health? Are those also becoming more favorable? Lucas: Auto insurance is still running hot, around five to six percent annual increases. Health insurance premiums are also climbing, though a bit slower. But homeowners is the standout improvement right now. Luna: So if you're a homeowner, this is genuinely good news. Your raise is finally beating something that was eating your budget. Lucas: Exactly. And it's a reminder to check your renewal notice. If your insurer is still hiking by four or five percent, you might be able to push back or shop around. The market is becoming more competitive again. Luna: Any advice for listeners who want to lock in savings? Lucas: Bundle policies if you can. Raise your deductible. And check for discounts — things like new roofs, security systems, or even being claims-free for several years. Small changes can make a difference. Luna: Especially now that the gap between wage growth and premium growth is in your favor. Lucas: Right. The window might not stay open forever. If catastrophe losses pick up again, insurers could re-accelerate hikes. But for right now, this is a rare bright spot in the cost of living picture. Luna: Well, I'll take it. It's nice to have one bill that isn't stretching the paycheck thinner. Lucas: Absolutely. And if you want to help us keep doing deep dives like this, you know where to find us. Luna: Buy me a coffee dot com slash fexingo. Thanks for listening, everyone.