Society has a habit of ragging on millennials for not being financially savvy — they don’t have enough in savings, they spend too much on lattes and avocado toast — but what if I told you that they are the largest share of home buyers, representing at 36 percent of all transactions. Sixty-five percent of these buyers were also first-time buyers, according to the National Association of Realtors (NAR).
The volume is surprising says Keith Gumbinger, Vice President of mortgage information website HSH.com. After the housing crash in 2008, young people were hindered by tight credit and no wage growth. They were also burdened with anxiety over getting tied up in homes might soon be worth less than they paid, like the buyers that came before them. “Fast forward a couple of years, and by contrast, steady economic growth, solid job markets, rising wages and resurgent housing markets have spurred confidence,” Gumbinger says. “These folks are now finding that homeownership is a desirable goal.”
Here’s how they’re making it happen.
They Use Their Digital Smarts…
The Internet has revolutionized home buying — and millennials are taking full advantage. Apps like Zillow and RedFin target millennials to give them a self-guided abode-buying experience. According to NAR, 95 percent of buyers already use the internet to look for homes and 51 percent buy homes they found that way. “Millennials research all aspects of the buying process, from researching agents and lenders to using online resources to help them with their home searches. They’re looking at agent reviews and lender reviews to make sure they find the best people to work with,” says Zillow economist Aaron Terrazas.
…And Their Instagram Savvy
“Millennials [also] use more visual resources to help them through the home search process, helping them to picture their own lives in these potential new homes,” says Terrazas. Virtual tours and staging of the actual home are more important to young buyers than they are for older generations, according to a Zillow report. Live virtual tours are important to 45 percent of millennials, compared with 35 percent of Gen X, 28 percent of Baby Boomers and 18 percent of Silent Generation buyers.
They Research Financing More Than Most
Millennials struggle more than the average buyer with getting the right mortgage and finding the right lender — 41 percent of millennials say determining the right kind of mortgage is a challenge, and 38 percent said it was hard to find the right mortgage lender, compared with 30% of overall buyers. “That’s not for lack of research though. Like they do with most steps, millennials research and check out different lenders through reviews as well as recommendations from friends and family,” says Terrazas. He suggests getting offline and meeting in person with a representative at your local lender can make a big difference. “They have a good handle on local market dynamics. Especially in hot markets with lots of competition, a focus on closing speed can make all the difference,” says Terrazas.
With Hattie Burgher