Another Reason to Fix Housing: Relocation Stimulus


Leather sofa: $659.00

Curtains: $150.00

Chinese take-out: $27.00

The impact climbing the property ladder has on the economy: priceless.

If you're looking for more reasons why we need to fix the housing mess, try this: It stimulates the economy.

In good times and in bad, the average new resident spends about $7,300 on everything from window treatments to take-out meals in the three months following a move, according to a report from marketing services firm Epsilon. This trend exists even if the move is only across town.

"What we're seeing is that when people are moving into a home they are making fairly big decisions on their purchases," said Donald Hinman, a senior vice president at Epsilon.

Not surprisingly, many of those decisions are tied to products needed for the home, but some spending is impacted in other product categories as well.

For example, those who move spend about 52 percent more than non-movers on home decor and furnishings in the year they move, according to Epsilon's research. The following year, their spending in this category trails off, but remains about 16 percent higher than those who didn't move.

Notably, those who move also tend to spend more on children's items, especially the year after they move. Their spending is about 20 percent higher than people who don't move at that point. This is true even though those who move and those who don't tend to have similarly sized families.

Movers also tend to spend less on apparel. Hinman expects this is because people cut back on clothing purchases to put more of their income toward sprucing up their home.

Epsilon, which gets a lot of its information from consumers who open credit cards or sign up for loyalty programs, says it's important for marketers such as Home Depot and Lowe's to identify who's moving and who's not, especially now when fewer people are relocating in order to maximize their chance to grab those home-related dollars.

The firm says monthly moves are down about 27 percent from the same period two years ago.

One potentially positive trend Hinman has spotted is that the pace of declines among those moving has flattened somewhat. Although he warns it's too soon to call it a bottom.

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