Millennials are coming of age. They’re now the biggest home-buying group of any generation, outpacing both baby boomers and Generation X.
What sets millennials apart from previous generations is their love for electronic gadgets, speediness, and convenience. Unlike older folks, millennials are less likely to ask a friend or relative for real estate advice. Instead, they go online, gathering research and information before stepping into a real estate or lender’s office.
It’s clear a big shift is underway. We'll look at how millennials are shaping the home-buying landscape and offer some tips on how lenders can tap into this growing market.
Who are the millennials?
A millennial is any person born between the early ‘80s and mid to late ‘90s. They’re 25% of the U.S. population and make up 21% of consumer discretionary purchases-—a staggering one trillion dollars in direct buying power.
Some millennials are old enough to remember rotary phones, while others are more familiar with iPhones and iPads. But regardless of when they were born, they all share a fondness for technology, transparency, and speed.
How millennials are shifting the real estate landscape
It’s clear that millennials have finally come of age.
They’re now the largest group of home buyers in the United States, making up 37% of the total home-buying market in 2019, with 52% in this group buying a home for the first time. Millennials also accounted for 45% of all new mortgage purchase volume at the end of 2018, compared to 36% for Generation X and 17% for baby boomers.
As these numbers clearly show, millennials are driving big shifts in the real estate and home loan market. The question is no longer when millennials will jump on the home-buying bandwagon, but rather, how can lenders keep up with what millennials want and demand?
How millennials approach the home-buying process
When it comes to real estate, millennials and younger people are keen to use technology to make their buying decisions. This includes everything related to the home-buying process, whether it’s searching for properties, comparing mortgage rates, or choosing a lender.
- 98% search for real estate online
- 84% use a mobile or tablet device to look at homes
- 68% walked through a home they viewed online
- 62% found the home they eventually purchased online
Millennials also like to shop around for the best mortgage rates, and they're more likely to obtain multiple quotes from lenders than their older counterparts. According to research gathered by StemLending, millennials obtain six mortgage rate quotes on average, versus an average of four quotes by Generation X and three quotes by baby boomers.
How to stay ahead of the shift
We’ve shown that millennials do a lot of online research and enter the home-buying process armed with data and information.
Yet, when it’s time to apply for a mortgage, 29% of millennials said the process of applying for a mortgage was somewhat or much more difficult than expected, citing “paperwork” and “process and steps” as the main obstacles. This means that nearly one in three millennials think paperwork is a hassle.
As a generation that relies on technology to get things done, millennials are chasing ever faster and more streamlined processes. Known to be curious and adventurous (they also like to buy fixer-uppers), they’re a generation that wants to stay informed and in-the-loop during their home-buying process.
What do millennials expect from their lenders?
- A seamless, transparent experience supported by technology. Millennials don’t like paperwork. A lender that can help facilitate a paperless process, offer purchase portal capabilities, and provide 24/7 online access to files will be seen as a more attractive partner.
- Full transparency with pricing and fees. Millennials want to know up front what their mortgage payment and costs are going to be. Both mortgage calculators and guaranteed closing cost calculators can be powerful tools in building trust with millennials who want to crunch the numbers before making a purchasing decision.
- Straight-up communication and trust. Millennials want to know their lender has their best interests at heart and will steer them to the most appropriate mortgage. Millennials are faced with different challenges than other generations, with 42% carrying student loan debt. They want to know: Can this lender work with me and my budget?
- Great customer service. Millennials are inquisitive and ask a lot of questions. Having an empowered customer service team they can contact with their needs and concerns will be seen as a big plus.
Not surprisingly, millennials look to online peer reviews for advice and will research a company's online presence prior to picking up the phone. Having a great online reputation with a track record of customer satisfaction is important in capturing the millennial market.
If you're looking for a great title and escrow partner who can exceed your clients’ expectations, why not keep us in mind?
At Timios, our goal is to provide your clients with a fully transparent experience from start to finish. Our simple, centralized approach offers transparency at every step of the way, which means greater speed, accuracy, and customer satisfaction.
Our technology supports:
- Real-time order status and tracking
- 24/7 online access to files and paperwork
- The ability to create a fully paperless office environment
- Integration with your loan origination system
- A single, integrated dashboard for ease and simplicity
Along with demanding great service, millennials are sensitive to costs. Our closing cost calculator provides guaranteed closing costs at the time of calculation, so you can show your clients exactly what their closing costs will be—even before they apply for a loan.
Please visit our site to learn more about the title and escrow process and how Timios can step in and help.
With over 250,000 transactions and $40 billion in total closings, remaining true to our values has made Timios one of the fastest growing title and settlement services companies in America.
Legal Disclaimer: The information provided on this document does not, and is not intended to, constitute legal advice; instead, all information and content available on this document are for general informational purposes only.