It's out! Worldwide ERC has published it's U.S. Domestic Permanent Transfers: Volume & Cost 2022 Report. The insights come from survey data obtained in the summer of 2022 from corporate mobility managers. While the trends may not be too surprising, the details are interesting. Let's take a look!
- Move costs have climbed to an all-time high in 2022. Costs for homeowners have hit $85,466 on average, and renters are at $33,532 on average.
- Looking out at 2023, companies are predicting further increases. Average cost for a homeowner are expected to reach $93,823 and for renters $36,486 - a 9% increase from today's already high numbers.
- Companies expect an increase in volume in 2023. How much of an increase? 5% on average.
- The top 5 most costly policy components are home sale assistance ($36,910 on avg.), loss on sale ($31,125 on avg.), household goods shipments ($16,465 on avg.), gross up ($14,289 on avg.), and cost of living support ($11,798 on avg.). The report lists the top 14 items.
- The most common type of home sale assistance remains the Buyer Value Option (BVO), with 65% of companies having it as a benefit. Direct reimbursements were the least common at 26%.
One really interesting element to review and consider was the information that compares costs of specific policy components between 2015 and 2022. Only three benefits went down in average cost over that time period: home sale assistance, duplicate housing, and lease cancellation, in large part likely due to hot housing markets where houses moved quickly. Otherwise, it's not surprising to see that everything else went up in cost. The greatest percentage increases were in final move expenses (87% increase), temporary living costs (67% increase), loss on sale support (43% increase) and household goods shipments (42% increase).
What we have seen from a volume and cost perspective
Here are a few additional insights related to U.S. domestic relocation that we have seen within our own client activity recently.
- There has been a 50% increase in domestic relocation activity YTD 2022 versus YTD 2021.
- Across all industries, we have seen costs for homeowners in 2022 (closed moves) reach almost $64,000, whereas the average cost in 2021 for homeowners was $80,250.
- Our clients on average spent $25,806 for a renters' policy in 2022, which was a tad more than in 2021 when on average they spent $24,328. Note that all of these are a bit under the ERC reported 2022 numbers.
- Over the last couple of years, we have seen about 65% of U.S. domestic relocations be "managed policy moves", while approximately 35% were "lump sum/self service" relocations.
- We also have continued to see an ongoing increase in the renter percentage with approximately two-thirds of authorizations being renters at origin.
Other thoughts on U.S. domestic relocation and mobility programs:
- Expect some improvement on home inventory for buyers in months ahead.
- There is expected to be more moves within an area (in-state, in-region).
- Suburbs will continue to attract relocatees in part due to cost and in part due to new work flexibility.
- Home prices will remain up, not dropping much in most locations.
- Companies are dusting off options for supporting home buyers facing high mortgage rates and ongoing high prices - options like temporary buydowns, MIDAs, and incent to rent benefits.
- While cost has increased as a primary concern, employee experience is still a goal with autonomy and personalization desired in the moving process.
- Mobility programs are continuing to consider how to support sustainability and diversity and equity initiatives.
- Mobility programs are looking at generational trends and especially concerned about appealing to millennials and Gen Z.
- Increasingly, companies are considering how to leverage relocation and assignments to improve engagement of existing employees and retention of them.
- Companies are expected to focus on improving internship programs to attract best and brightest and we anticipate greater support from mobility programs and increased volumes in the next year.
Discover the latest about U.S. Domestic Permanent Transfer Volumes and Costs. Our major findings include: • Increase in projected volumes for 2023 • Average total transfer costs have reached an all-time high • Home sale assistance remains the most expense component of a transfer. Learn about these facts and more in our 2022 U.S. Domestic Permanent Transfers: Volume & Cost Report.