Challengers, change-makers, boundary-pushers and influencers—these are all terms I’d use to describe the well-known millennial generation. Roughly between the ages of 23 and 41, this generation has made its mark on the U.S. economy. Particularly due to growing up in a time when technology was rapidly evolving, millennials are innately in tune with 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 it. In an article on how millennials are shaping this country’s economics, Richard Fowler summed it up this way, “Millennials have learned to innovate quickly, organize robust networks for political and economic gain, rewrite the rules and prepare for the unseen and the worst.”
Millennials aren’t afraid to break barriers. As one of the most active generations in the U.S. housing market, this group is pushing the boundaries of home ownership. At about 80 million strong, millennials currently make up the largest share of homebuyers (43%) in the U.S., according to a recent National Association of Realtors (NAR) report. Simply due to their numbers and eagerness to become homeowners, this cohort is quite literally shaping the next frontier of the homebuying process. Once known as the “rent generation,” millennials have proven to be savvy buyers who are quite nimble in their quest to own real estate. In fact, I don’t think it’s a stretch to say they are the key to the overall health and stability of the current housing industry.
A new survey commissioned by my company found that millennials are poised to impact the market throughout 2022. Despite uncertain economic factors and soaring student loan debt, they still have quite the appetite to achieve the goal of homeownership. Our survey of 1,000 participants shows 26% of this group are likely to purchase a new home this year, compared to 12% of Gen X and 6% of baby boomers. These findings suggests that millennials will continue to drive the majority of housing demand, which has remained very strong throughout the pandemic period. They also lead the pack in terms of those likely to refinance at 32%, which is more than triple the 9% of baby boomers who are planning to refinance in 2022.
Due to the competitiveness of the housing market and other factors, buying sight unseen has significantly increased over the past few years. While it may not be the most desirable way to purchase a property, millennials don’t seem to be as deterred as their counterparts. Our survey found 23% would purchase a home without seeing it in person first. That leap of faith is not as welcomed 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 sectors of the housing industry, like the auction market, it’s no surprise that millennials lead the way in that arena too. More than half, or 55%, either have or would be willing to buy an auction property.
In my years of watching 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 that preceded them, but still calculated in their actions. Many see potential before others and are willing to be the first to dive into a new venture. From buying auction properties, to buying sight unseen, millennials continue to prove they are trendsetters by nature.
Digitizing The Homebuying Experience
Over the years, this group’s influence has also helped to usher the homebuying process into new dimensions. The desire of lenders to provide a positive consumer experience for this tech-savvy generation led to acceleration in several areas. Capabilities like virtual tours, digital appraisal scheduling, virtual inspections, remote notary services and digital closings have all taken major steps forward during their tenure as the most formidable segment of buyers. While some of these solutions were leveraged in response to the pandemic, the opportunity to infuse more technology into the traditionally manual homebuying process is a win for borrowers of all ages. I’ve noticed these advances have led to increased transparency—an area that is high on the priority list for many millennial buyers.
Ways To Serve Millennials
With many prepared to buy and refinance in the second half of 2022, it would be wise for lenders to prioritize establishing 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 do rely on real estate experts to guide them through the homebuying journey. It’s important to offer up professionals who can answer their questions in addition to providing things like blogs, articles and other relevant insights.
2. Reduce paperwork. Millennials are pretty 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’re a loan officer or lender, make sure to be up front about fees, timelines and anything that can impact their transaction. I’ve found millennials like to know what they’re paying for and why.
Millennials have done a lot for the real estate industry, but they are not done yet. Even as the older members of Generation Z start to creep into the market, millennials will likely continue to challenge the housing industry and rewrite the rules of homeownership and the homebuying experience.