Holiday Retail Booms While Housing Slows Down

It’s almost time to wrap up 2024’s year-end wrap-ups. (The “2024 season comes to an end” audio sampled in that link has been featured in nearly 50k videos on TikTok.) But in the last days of rush ordering holiday gifts, there doesn’t seem to be any end to consumer spending.

Retail sales are surging faster than expected this holiday season, with a 0.7% increase month over month, and even big-ticket spending in categories like auto is up. Electric vehicle sales, in particular, set a global record amid pushes from brands like Hyundai striving to double driver purchase intent in electric and hybrid vehicles by 2030. (However, it will be worth keeping an eye on electrification patterns, considering the upcoming administration's vocal opposition to EVs.) For now, all this consumer spending is a sign, according to a new industry report from McKinsey, that consumers are feeling more optimistic than projected.

That hopefulness doesn’t extend to the housing market. Even though Bank of America has modified its forecasted 2025 increase in home prices from 4.7% back in June to just 2% this week, 2024 is projected to have the slowest housing market in 30 years, at 4 million sold homes nationwide. Fannie Mae predicts an equally slow landscape going into 2025; while Zillow projects a reduction in mortgage rates and return to historic norms. 

The homebuying process is a longer and more aspirational aspect of consumers’ lives than even the largest big-ticket items. But these macroeconomic indicators, taken together, paint a picture of consumers in transition: increasingly distrustful of brands, yet still engaging in broad purchase behaviors.

Why it matters: Consumers' major concerns and speculations about the broader economic landscape can frequently play out in unpredictable ways (the rush of panic buying, for instance). Embracing this inherent irrationality by aligning marketing messages to people’s emotional needs will be critical to breaking through crowded digital and social feeds as we head into 2025.  

Other news and trends

• Today in cybersecurity. The Department of Homeland Security has identified China, Russia, Iran, and Israel as primary nations exploiting SS7 vulnerabilities to spy on individuals in the U.S., enabling interception of calls, texts, and location tracking. Amid these accusations, there is an increased focus on sources outlining the best methods for individuals to protect their cybersecurity, particularly by assuring encryption with end-to-end messaging apps like Signal or WhatsApp.
• American teens: Chronically online. A Pew Research Center survey released late last week revealed that 46% of U.S. teens are online almost constantly, with a preference for video- and image-based platforms. YouTube remains the most popular platform for that cohort, with 90% usage, followed by TikTok (63%), Instagram (62%), and Snapchat (55%). Notably, Facebook usage has declined to 32% from 71% a decade ago. The study also highlights demographic variations, with Black and Hispanic teens reporting they were more likely to use TikTok “almost constantly” compared to white peers.
• Still trending: Luigi’s lore. As the case against Luigi Mangione unfolds, so too do the efforts to monetize his crime. Beyond the surge in Mangione-themed merchandise and the occasional unhinged drive-by of the prison where he’s detained, his story is already generating Hollywood buzz and true-crime documentary fever. To paint a complete picture, the producers of a documentary are soliciting perspectives from friends and family of Mangione and slain CEO Brian Thompson, as well as from employees and consumers insured by UnitedHealthcare, through a tip-line account on Instagram.

Contributors: Head of Social Content and Engagement Strategy Cristina Lawrence, Senior Vice President Jerry Lawrence, Group Vice President Andrew McKernan, and Senior Vice President Tammy Pepito. At Razorfish, we help brands define their higher purpose—the emotional reason why they belong in people’s lives. Ready to find your purpose? Learn more here.