Understanding and Reaching Millennial Homebuyers

They grew up during the financial turmoil of the Great Recession, only to face the economic upheaval of the pandemic as young adults. As a result, many of today’s “NextGen” cohorts – members of Gen Z and Millennials ages 22 to 37 – are skeptical of the homeownership dream and distrust financial institutions. But with one in three borrowers – and many more potential homebuyers – belonging to this cohort, loan originators (LOs) need a way to. the question is, how?

To find out, we sat down with housing industry prodigy Kristin Messerli, who shared findings from the latest NextGen Homebuyer Report. Published by Cultural Outreach, a market research firm founded by Messerli, in collaboration with the Mortgage Bankers Association and National MI, the report identifies the primary concerns of NextGen homebuyers based on survey responses from 1,000 diverse individuals who either purchased a home in the last three years or are planning to purchase a home soon.

How NextGen Buyers View Homeownership

To work effectively with NextGen buyers, LOs must first understand their views on homeownership. According to Messerli’s research, common NextGen statements on homeownership include the following:

  • “I want to buy a home — but I’m not sure I can.” 
  • “Purchasing a home requires 20% down.”
  • “Purchasing a home requires a traditional job and great credit.”
  • “I want more personalized attention and care.

The first statement points to general uncertainty about the homebuying process, which Messerli speculates may stem from NextGen buyers’ lack of financial education as well as investment unease in the wake of COVID-19. The next two statements are common misconceptions that highlight the need to educate prospective homebuyers on their financing options. And the final statement suggests that, despite having a high comfort level with technology, today’s younger adults value a certain amount of guidance and handholding when it comes to important financial decisions.

Collectively, these statements underscore the important role LOs play in helping NextGen buyers develop the confidence and financial literacy they need to become homeowners. While this cohort may be comfortable conducting a home search or even completing an initial loan inquiry online, the research strongly suggests LOs can help proactive outreach and education.

Three Communication Channels for Reaching the NextGen Market

Messerli recommends LOs and industry professionals lean into the following channels to better connect with the NextGen market:

  1. Social Media
    NextGen buyers spend one to five hours per day on social media. When it comes to seeking out advice for personal finance, only Google and family and friends rank higher than social media
  1. Video Content
    Overwhelmingly, NextGen buyers turn to video content for financial matters. Over 74% cite YouTube as their go-to source for financial advice, especially when videos are narrated by a real person with professional insight into the topic they’re covering.
  1. Online Reviews
    Google is the #1 source for personal finance information, with 94% of NextGen homebuyers reporting that Google Reviews are at least somewhat important in their homebuying decisions.

Regardless of which communication channel(s) they rely on homebuyers are happier when they have a voice throughout the homebuying process, so LOs can improve the borrower experience with frequent and honest communication and by regularly soliciting personalized feedback. This feedback will help LOs correct an experience, learn from a poor survey result, or develop a plan for complaint resolution.

The integration of Nexus Vision™, our turnkey business intelligence platform, with Experience.com makes evaluating the quality of your customer experience easier than ever. Nexus Vision can help identify top performers based not only on loan volume but on customer experience as well, making it a powerful tool to pinpoint possible issues and reward excellence in your organization.

Watch the full webinar with Kristin Messerli now.

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