The volume of millennials entering the homeownership market continues to grow. With lower interest rates and increasing capacity to look at homes and apply for loans online, the industry has finally captured this demographics’ attention. The question is now twofold…. How do you gain more of the millennial market share and more importantly, how do you hold onto this new generation of customers?
Millennials are unquestionably entering the world of homeownership later in life.
To a lesser degree than any other demographic, they are likewise entering marriage and starting households at an older age. The Pew Research Center’s study from last year highlighted that only three out of every ten millennials between the ages of 23 and 38 lived with a spouse and child; the study’s definition of a family unit. The marriage rates for millennials averaged 44 percent, nearly 10 percent less than any other demographic for this age group, including Gen Xers. And although millennials are still of child-bearing age, the study noted that only 55 percent of millennial women have had children, compared to 62 percent of Gen Xers and 64 percent of Boomers of similar age.
Despite this latent desire to form households, millennials now make up a growing percentage of the mortgage market. Millennials are reflected as the largest borrower segment in Freddie Mac’s recent article, “Homebuying: A Generational Snapshot.” Closed purchase volume alone, as recorded on the Encompass platform, has increased for the past three consecutive months for millennial applicants between the ages of 22 and 41. The average age of millennial borrowers has remained relatively unchanged. When targeting this generation the note that the average age for millennial borrowers was reported as 32.9, with May and April both reflecting an average borrower age of 32.4 years old.
The Freddie Mac Homebuyer Generational Snapshot highlighted that although they are the most educated generation, millennials have a lower financial awareness as compared to other demographics. In general, millennials have a fairly optimistic outlook on life. One of the primary contributors to millennial behavior is that they were raised for the most part during an economic boom. This has contributed to a lack of financial wherewithal as they tend to focus on the purchasing experience versus monetary value.
As lenders seek to attract and retain this generation, it is important to understand millennial values, which include transparency, accountability, persistence, and personal responsibility. Here are the HomeBinder TOP 5 traits to leverage when engaging millennials:
- Embrace personal responsibility – Millennials want to be good homeowners but often lack the experience and tools needed to address homeownership maintenance and repairs.
- Want a digital experience – For millennials that are typically not inclined to manage or retain paper documents, there is no replacement for ease of digital access to key information and documents with HomeBinder.
- Stress about personal financial status – Gaining understanding, organization and a homeownership game plan helps create and build confidence in overall financial health.
- Place trust in businesses – Let HomeBinder help you give millennials another reason to trust your company for the long haul, building rapport and engagement.
- Demand a meaningful customer experience – Millennials will even pay to expand service… Give them more than they’re asking for with a personal HomeBinder for their new or just refinanced home.
Lenders should anticipate the needs of their millennial borrowers, instill confidence, give them control, provide alternative approaches to doing business, and incorporate digital innovation. HomeBinder is an innovative business differentiator that is uniquely positioned to help lenders capture the attention of millennial borrowers, establish rapport, and create long-term relationship value. Millennial borrowers appreciate an orchestrated, thoughtful, and personalized experience. HomeBinder delivers a digital homeownership platform that embodies what’s important to millennials, offering relevant homeowner data, actions, education, and document access through a partnership branded binder. HomeBinder is relevant today, actionable tomorrow, and adds value throughout the life of the property. To find out more about the HomeBinder revolutionary approach to millennial homeowner engagement and the “Client for Life” opportunity, visit us at www.homebinder.com, contact us directly at 800.377.6915, or Book a Demo today!
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