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Solo nation: American consumers stay single

January 25, 2012: 5:00 AM ET

A record number of people in the U.S. now live by themselves -- and they spend $1.9 trillion a year. Businesses are beginning to take notice.

By Eric Klinenberg, contributor

FORTUNE -- In 1957, University of Michigan psychology professors Joseph Veroff, Elizabeth Douvan, and Richard Kulka released a survey that examined American attitudes to being single. The findings were stark: 80% of those surveyed believed that people who preferred being unmarried were "sick," "immoral," or "neurotic." At a time when more than 70% of adults were married, it's not surprising that people would express a preference for wedded life. But the scorn certainly sounds jarring to contemporary ears.

Oh, how things have changed. Americans are now within mere percentage points of being a majority single nation: Only 51% of adults today are married, according to census data. And 28% of all households now consist of just one person -- the highest level in U.S. history. That second statistic may appear less dramatic than the first, but it's actually changing much faster: The percentage of Americans living by themselves has doubled since 1960.

The extraordinary rise of living alone is among the greatest social changes since the baby boom. Until recently, no culture in human history had sustained large numbers of people in places of their own. Today more than 40% of households have just one occupant in cities such as Atlanta, Washington, D.C., Denver, St. Louis, and Seattle. In Manhattan, nearly 50% of households consist of a single occupant, a number that seems impossibly high until you discover that the rate is similar in London and Paris, and even higher -- a staggering 60% -- in Stockholm.

Conventional wisdom is that singletons, the term I'll use for those who live alone, tend to be lonely and isolated, perhaps even social failures. Big-idea books such as Bowling Alone and The Lonely American have portrayed the U.S. as a disconnected society full of loners. A steady stream of TV pundits and marriage advocates warn that being uncoupled jeopardizes our wealth, well-being, and longevity.

But after conducting more than 300 interviews and reviewing mountains of economic, sociological, and historical evidence, I've concluded that the conventional wisdom has it wrong. In fact, most people who live alone do it by choice. Many will pair up with a romantic partner eventually, but given that relationships often don't last a lifetime, singletons are reluctant to settle. The proof is what comes out of their pocketbooks, since they willingly pay a premium for the privilege of living alone.

The consequences of widespread solo living are profound but unappreciated, shaping our families and communities, our relationships, and ourselves -- and not in the ways you might imagine. Singletons play an essential yet unappreciated role in revitalizing cities and animating public spaces. Compared with married people, they're more likely to eat out in cafés and restaurants, exercise in a gym, take art classes, attend public events, and volunteer.

Perhaps more important, singletons are fueling the economy. They spend more discretionary dollars than their married counterparts. Their average per capita annual expenditure was $34,471 in 2010, according to the federal Consumer Expenditure survey, compared with $28,017 for married individuals without kids and $23,179 per person in the highest-spending families with children.

It's a simple but powerful equation: Increasing numbers of singletons, combined with high income, equal rising economic clout. Indeed, the Bureau of Labor Statistics estimates that consumption by U.S. singles contributes $1.9 trillion to the economy annually.

Historically, corporations have made little effort to target singletons. But their purchasing power has grown so dramatically that companies are beginning to pay attention: Realtors such as Coldwell Banker are soliciting singletons. Home-improvement giant Lowe's (LOW) released a TV advertisement featuring a lone woman who is renovating her bathroom. Iconic car-brand Chevrolet ran an ad in which a single woman responds to a bad date by going for a drive in a Malibu with a female friend. Even DeBeers, which long pitched its diamonds as the embodiment of a couple's romantic bond, has sold a "right-hand ring" for unmarried women who want to treat themselves to elegant jewelry. Singletons are a rising presence -- and American business has only begun to respond.

The transition to adulthood

The Great Recession forced many Americans to make sacrifices, and Marsha Figaro is no exception. Although she's kept her job as the director of outreach and special programs at Northwestern University, the outgoing 33-year-old has cut back on extravagances like international travel and expensive meals and become a bargain hunter. She even sold her condominium after her neighborhood began to feel unstable. But rather than seek out roommates, she rented a one-bedroom apartment in Chicago's buzzing Lakeview neighborhood, where thousands of other singles live.

"I absolutely love having my own apartment," Figaro says. "I can do what I want, when I want to do it, whether it's eating, watching Hulu, going out, or just going to sleep. I definitely want to move in with someone when I find the right person. But it would be hard to give up all of this."

The daughter of Afro-Caribbean immigrants, Figaro broke from family tradition by moving into her own place in her twenties. "I was euphoric when I got my apartment," she recounts. "It was totally liberating. I didn't want to wait around my parents' house until I found a husband. I wanted to start my life."

A majority of American singletons are, like Figaro, women: about 18 million, compared with 14 million men. Her age group, those 18 to 34 years old, has the smallest number living on their own, but it's growing the fastest: from 500,000 in 1950 to 5 million today. (The biggest category, more than 16 million, consists of those between 35 and 64, making this in part a phenomenon of the baby boom. See chart above for more details.)

The economic downturn has deprived many young people of the means to go solo, leading some to label the current crop of young adults the "boomerang generation," as twentysomethings moved back home. But despite this recent erosion, the long-term trend is undeniable. In 1950, 1% of Americans 20 to 29 lived alone. That figure rose to 11.97% in 2007, right before the financial crisis, and then slipped to 10.94% in 2011.

For young, never-married adults in Figaro's situation, having a place of one's own is a mark of success. And with people marrying later than ever, living alone is a fundamental way to make the transition to adulthood.

But single life is a collective experience, at least in cities, because the concentrations of solo dwellers help generate what the journalist Ethan Watters calls "urban tribes," social networks that substitute for traditional families. In Chicago, Figaro and her group of single girlfriends meet up in bars, restaurants, parties, and clubs. They encounter similar tribes, some all male, some with a gender mix.

Uri Ratner, a handsome 39-year-old who lives alone and runs an eight-person digital creative agency out of his loft in the West Loop, socializes five or six nights a week. "To be honest," he says, "my biggest problem is that I have too many things going on in my schedule. I overcommit. I love online dating, and I know I should be doing it more often. But I'm too busy. Between work and all my friends here, I just don't have the time."

Ironically, the 24/7 work culture, which has shattered the barriers between personal and professional life, makes living alone more attractive. After all, long work hours mean plenty of interaction at the office. Says one television producer: "I'm surrounded by a lot of people with similar interests. I do a lot of interacting, talking, e-mail, bopping down the hall to discuss a story or just shoot the shit." His work friends are his most common companions.

Although pundits worry that singletons become socially isolated, for most the reverse is true. Young urban professionals struggle more with avoiding the distraction of social activity than with being disconnected. Surprisingly, the middle-age singletons I interviewed, most of whom are divorced, express similar concerns: They reported that living alone has become intensely social -- not only because of the Internet and online dating, but also because they live in places filled with people in the same situation who are eager to be with each other. They were also the most likely to say, as one woman in her sixties put it, "There's nothing lonelier than being in the wrong relationship." In the abstract, they prefer to live with a romantic partner. But in real life they're unlikely to compromise on a companion.

Where singletons go to live

One reason solo life has become so appealing is that contemporary cities offer abundant residential options for people who want a central location but don't need much space. Apartments designed for single inhabitants, though sometimes available in the past, didn't become common until the 1960s, when developers began to recognize the rising demand. Neighborhood cultures developed around single life: Lakeview in Chicago. The Marina District in San Francisco. Belltown in Seattle. These weren't bohemias but places for urban professionals, the young and never married as well as divorcés. Solo living was suddenly in vogue.

In recent years a few developers have targeted affluent singletons. Related Companies, a privately owned Manhattan-based real estate firm with more than $15 billion in real estate assets, has invested heavily in the high end of the rental market, and is enjoying tremendous success despite the sluggish housing market.

In May 2011, Related opened MiMA (for Middle of Manhattan), a 63-story tower west of Times Square with rental units, a hip hotel with a booming bar scene, and a theater designed by Frank Gehry. It also boasts a swanky health club, sun terraces, an outdoor movie screen, a billiards lounge, three party rooms, and a canine spa and walking service. MiMA has 814 rental apartments, 641 of which are studios or one-bedrooms. Some 65% of occupants live alone. Although MiMA is expensive (studios start at $3,600 a month), six months after opening more than 90% of the apartments were leased.

Related's strategy is based on extensive market research. "Our niche demographic is households with more than $100,000 in income," says Joanna Rose, a vice president at Related. "They're looking for luxury buildings with high-end services. They are getting a lifestyle, not choosing an apartment on the cost of rent alone." Related has similar properties in Boston, Los Angeles, and San Francisco, and the company recently broke ground on another luxury rental tower in Chicago.

None of this should suggest that singletons are interested only in rental apartments. On the contrary, housing purchases by singles -- women, especially -- have spiked in recent decades. Singles buy one-third of the homes in the U.S. today. Unmarried men and women account for 10% and 21% of all buyers, respectively, according to the National Association of Realtors.

Multiple factors have opened housing to single women. They range from the rapid influx of women into the paid labor market and laws prohibiting lenders from rejecting applicants on the basis of sex or marital status to the divorce revolution and the delay in age of marriage.

Realty giant Coldwell Banker has taken notice. Says Coldwell CEO Jim Gillespie: "Our salespeople are aware of this demographic and actually actively go after it. I go on the road all the time and tell all of our associates not to forget about single buyers because they're everywhere."

Single women's relative economic success is only part of the reason they have become the fastest-growing participants in the housing market. After all, men continue to earn more -- but males in their thirties and early forties show little interest in buying a home. Not long ago most women viewed getting married as the key moment in the transition to adulthood. But for a growing number, buying a home has become a powerful way to pivot from one life stage into another. It's a signal, to themselves and to those who know them, that they're embracing their independence and that they're ready to invest in themselves.

The power of one wallet

Till now, the real estate market has been more attentive to singletons than most other industries. But consciousness is beginning to bubble up, particularly in businesses such as food and alcohol, says David Eastman, the North American CEO of advertising behemoth JWT. For example, he says, "if you look back at how alcohol was marketed in the U.S., it was generally done in a way that promoted people in couples as the aspirational thing to be rather than people in communities or people with friends." He says a longtime agency client, vodka maker Smirnoff, recently began emphasizing images of friends in groups. Similarly, JWT analyzed restaurant design not long ago: "They're going much more with communal tables," Eastman says, "making it much easier for individual people to mingle rather than going for the twos or the fours, which are the couples or the family seating."

The evidence of singletons' buying power is beginning to emerge: in packaged foods, where Nestlé's research shows that 90% of its Lean Cuisine meals are eaten alone (the company says it tried -- and failed -- to sell meals that could be shared by two people); in home furnishings, where Ikea reports that sales of products for "small space" living (where a single person is more likely to reside) are rising; to travel, where Norwegian Cruise Line has begun offering special "studio staterooms" for solo travelers.

These changes can't happen fast enough for Sherri Langburt, whose website, SingleEdition.com, offers advice and products for successful people who live alone. "Everything online for singles was about dating," she says, explaining why she launched the site in 2007. "But when I lived alone, my life wasn't all about dating. I had a lot of other concerns, things I wanted to learn about or try, and there were no resources to support my lifestyle. No good information about things like traveling alone or cooking for one. Obviously I wasn't the only person interested in content like that." Langburt argues that what has happened in recent decades with selling to senior citizens -- a slow recognition of the market's importance -- will occur with singles.

The impediment, Langburt and others say, is that many advertisers believe singletons don't identify primarily by that label -- a point Langburt vehemently disputes -- and can't be targeted that way. Companies market to boomers or thirtysomethings or affluent city dwellers, any of whom may happen to be single. But most advertising conveys an aspirational message, and marketers don't think anyone aspires to be on their own.

"I think companies still regard [singles] as a niche rather than the majority," says JWT's Eastman. "But I sense that if the statistics keep going the way they are, it will end up being the majority." European countries already display higher rates of living alone than in the U.S., and there are sharp increases in emerging markets such as China, India, and Brazil; that suggests that many choose to live alone whenever there's sufficient wealth and comfort. For them, it isn't punishment -- it's liberation.

Eric Klinenberg is a professor of sociology at New York University. His new book, Going Solo: The Extraordinary Rise and Surprising Appeal of Living Alone, © 2012, from which this article was adapted for the February 6, 2012 issue of Fortune, will be published by the Penguin Press on Feb. 6.

--Reporter associates: Daniel Roberts and Doris Burke

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