"We're seeing increases in rental volume that suggest that we may be nearing a turning point in the cycle," says Donald P. Hinman, SVP of Epsilon, a marketing firm that benchmarked new-mover data against real-estate trends and consumer purchases.
"Along with the high unemployment numbers, we're seeing that the rate of existing home sales is still deteriorating, while the decline in the rate of people moving is flattening out. People who formerly owned houses are now moving into rental properties," he says--a trend he expects to continue as more and more people find themselves pulling up stakes to find a new job.
In 2008, about 14 million people moved, compared to the historical average of 18 million. New movers tend to be young, single and affluent, and more likely to earn between $100,000 and $199,000 annually than people who don't move.
For retailers, monitoring even the tiniest change in the relocation market is important: When people move, they shop. Epsilon reports that the average new resident spends $7,300 on everything from window treatments to takeout meals in the three months following a move. And they continue to shop: While they spend an average of 52% more than non-movers on home décor and furnishings in the first year in their new digs, they shell out 16% more than non-movers for the second year.
And with 50,000 more people moving into rental properties each month, that means that bigger-ticket items--household appliances and remodeling projects, for example--are less necessary. But more portable items, such as high-end coffeemakers, may have greater appeal. "They allow consumers to invest in their rental home, but they're still buying something nice for the house they eventually plan to buy. They want something they can take with them," he says.
The study also found that these newly frugal movers are making "very conscious decisions to cut back spending in other areas," says Hinman. "There was a decrease of about 24% in apparel and accessories spending, as well as a 16% decrease in gifts. These people are switching their focus to their home, and make very deliberate choices about their discretionary income."