August 2024
On the move: Hidden costs and slowing spending
A rise in hidden costs of homeownership, like property insurance and property taxes, are impacting moves and related spending.
Key takeaways
- Bank of America aggregated deposit data suggests that fewer households are moving between cities. In the second quarter of 2024, moves across cities fell 4% year-over-year (YoY) after a 15% YoY decrease this time last year. Those that are moving, however, are skewing towards Gen Z and lower-income households, likely as more households move out of necessity as opposed to choice.
- Some households are likely deferring moves due to increased "hidden" costs of homeownership (e.g., insurance, property taxes). Bank of America aggregated payments data suggests these costs are up significantly YoY, especially in the Sun Belt. And a study by the Federal Reserve Bank of San Francisco suggests that this area is affected by another "hidden" cost: climate change.
- Gen Z and lower-income movers are likely searching for affordability, particularly in the rental market. We find those metropolitan statistical areas (MSAs) with relatively more affordable rents are seeing the fastest population growth in Q2 2024.
- The fewer overall movers and the skew to younger/lower income movers is depressing consumer spending on moving-centric categories such as furniture. But if moving rebounds, we could see a tailwind to these areas of spending.
Read our full analysis for a more in-depth look at these trends.
