Miriam Moore is the president of Default Services at ServiceLinka provider of transaction services to the mortgage and financial sector.
Challengers, changemakers, border-pushers and influencers – these are all terms I would use to describe the well-known millennial generation. Between the ages of 23 and 41, this generation has left its mark on the American economy. Mainly because they grew up at a time when technology was evolving rapidly, millennials are naturally attuned to tech trends and tend to challenge the status quo, a combination that continues to change the way we live and work like no generation before. . In an article on how millennials are shaping this country’s economy, Richard Fowler summed it up like this: “Millennials have learned to innovate quickly, organize robust networks for political and economic gain, rewrite the rules and prepare for the invisible and the worst.”
Millennials aren’t afraid to break barriers. As one of the most active generations in the US housing market, this group is pushing the boundaries of homeownership. At about 80 million strong, millennials are currently the largest share of home buyers (43%) in the US, according to a recent report from the National Association of Realtors (NAR). Simply because of their numbers and eagerness to become homeowners, this cohort literally represents the next frontier of the home-buying process. Once known as the “rent generation,” millennials have proven to be savvy buyers who are quite adept in their real estate search. In fact, I don’t think it’s a stretch to say they are key to the overall health and stability of current housing construction.
A new survey commissioned by my company found that millennials are poised to influence the market in 2022. Despite uncertain economic factors and rising student debt, they still have a big appetite to achieve the goal of home ownership. Our survey of 1,000 participants shows that 26% of this group are likely to buy a new home this year, compared to 12% of Gen X and 6% of Baby Boomers. These findings suggest that millennials will continue to drive the bulk of housing demand, which has remained very strong throughout the pandemic period. They are also leading the way in those likely to refinance at 32%, which is more than triple the 9% of baby boomers who plan to refinance by 2022.
Due to the competitiveness of the housing market and other factors, unseen buying significantly increased In recent years. While it may not be the most desirable way to buy a home, millennials don’t seem to be as deterred as their counterparts. Our research found that 23% would buy a home without seeing it in person first. That leap of faith isn’t so welcome for the older generations, as only 16% of Gen X and 5% of Baby Boomers would consider buying a home without seeing it first. And when it comes to emerging housing sectors like the auction market, it’s no surprise that millennials are leading the way. More than half, or 55%, have or would be willing to buy an auction item.
In the years that I’ve been monitoring their real estate habits, it’s clear to me that millennials have a keen sense of opportunity. They are often less risk averse than the generations before them, yet calculated in their actions. Many see potential earlier than others and are willing to be the first to dive into a new venture. From buying auction items to buying unseen sight, millennials continue to prove that they are trendsetters by nature.
Digitizing the home buying experience
Over the years, the influence of this group has also contributed to a new dimension in the buying process. The desire of lenders to provide a positive consumer experience to this tech-savvy generation has accelerated in several areas. Opportunities such as virtual tours, digital appraisal planning, virtual inspections, third-party notary services and digital closings have all made great strides during their tenures as the most formidable segment of buyers. While some of these solutions have been deployed in response to the pandemic, the ability to bring more technology into the traditionally manual home-buying process is a win for borrowers of all ages. I’ve found that these advancements have led to greater transparency – an area that is high on the list of priorities for many millennial buyers.
Ways to Serve Millennials
With many ready to buy and refinance in the second half of 2022, it would be wise for lenders to prioritize building lasting relationships with this powerful demographic. Here are some other steps business leaders can take to serve millennials:
1. Be a reliable resource. Many millennials rely on real estate experts to guide them in buying a home. It is important to provide professionals who can answer their questions, in addition to providing things like blogs, articles and other relevant insights.
2. Reduce paperwork. Millennials are quite tech-savvy, and many generally prefer to receive, review, and sign documents electronically as opposed to the traditional pen and paper.
3. Be transparent. If you are a loan officer or lender, make sure you are aware of fees, timelines, and anything that may affect their transaction. I’ve found that millennials like to know what they’re paying for and why.
Millennials have done a lot for the real estate industry, but they’re not done yet. Even as the older members of Gen Z begin to creep into the market, millennials will likely continue to challenge the housing industry and rewrite the rules of homeownership and the buying experience.