Millennials compose most of the US population, in fact they had been the turning tides for politics as well but why are Millenials also important for the real estate industry? According to a report by Down Payment Resource, 61% of first-time homebuyers purchased their homes under the condition of low downpayment (6% or less). This trend is true across mostly all mortgage types as 73% made a down payment of only less than 20%.
Based on available US Census data, 75.4 million Americans are Millennials. This generation are those born in the 1980s up to mid-1990s to early 2000s. Typical age of Millennials are from 20-36 and are now bigger than Baby Boomers (ages 52-62) and Generation X (ages 37-51). Growth in this age generation continues to grow as young people find immigration to the Us compelling.
Millennials and Real Estate Industry
“It’s clear from the survey results that Millennials have a lot of anxiety built up about the home buying process,” according to David Norris, Loan Depot’s Head of Retail Lending.
This anxiety creates lots of opportunity for lenders and brokers to be creative about their processes so that they can give the best offer to Millennials. The government is also favor regulations that helps them qualify for loans to purchase their homes.
” There is good news, however, as there’s more flexibility than most Millennials think regarding how to qualify for a loan and what’s needed for a down payment,” he added.
Millennials are tech savy and occupy jobs and positions that are most of the time lucrative. Unlike other generation they are also keen in spending more to secure their family and future. They will spend as long as it is fair and on the budget. Strauss and Howe stated seven basic traits to the Millennial generation which include special, sheltered, confident, team-oriented, conventional, pressured, and achieving.
Since housing is part of most of the traits above, it will fall under the top priority of Millenials. The real estate industry benefits from the fact that buying a home is considered as a big achievement for millenials. It is a way to secure their family and future.
How to capitalize on the Millenial buying trend?
Realtors need to focus on programs which will greatly appeal to Millenials. Partnership among brokers and real estate agents is highly recommended to achieve this. In fact, this is one of the reasons for the Home Mortgage Alliance Corporation (HMAC) “true partnership” concept.
If you are a branch or a broker and want to understand more on how to improve and capitalize on this trend then you can contact us.
Meanwhile, if you are a Millennial searching for the right loan for you message us and we will help you too.
- Wikipedia contributors. “Millennials.” Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 20 Oct. 2017. Web. 25 Oct. 2017.
- “Millennials overtake Baby Boomers as America’s largest generation.” Pew Research Center.
- “Millennials Flock Towards Low Down Payment Programs,” Real State with Brian Koss.