Millennials Top the List of Current Homebuyers

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We knew it would happen sooner or later and so it has. The Millennial generation, the single largest group of current consumers, is finally looking to buy a home.

In fact, in the past 12 months, Millennials have topped the list of home buyers. It’s time for this generation to make its mark on the housing industry and take its place in shaping the economy.

By generation, the percentage of home sales over the last 12 months ranked as follows:

• 42%  Millennials
• 29%  Gen Xers
• 25%  Baby Boomers
• 04%  73 or older

The biggest challenges to this new generation of home buyers were finding homes they could afford and then coming up with the required down payment. Sounds like the same problems encountered by most homebuyers.

These challenges were followed closely by finding a home in their desired location and a home that had the amenities they wanted. Again, this is not unique to Millennials.

The outlook for the purchase market is good for 2018. Although home prices have risen, they are now starting to stabilize and should do so more with rising rates.

A slight rise in rates shouldn’t deter potential homebuyers as long as the economy continues to grow.  We hope.

Unfortunately, if the economy doesn’t continue to grow, rates probably won’t increase and home prices may start to fall. We don’t want that.

I’m sure Realtors and builders are working hard to get more homes on the market, including those amenable to Millennials.

When they succeed, Lenders need to be ready with ways to serve them and their new buyers.  Not just through technology, which we’ve talked about extensively in the past.

But, they must serve Millennials through education, loan products and underwriting standards that can help them, as well as others, acquire a home they can afford and maintain, in the area they want.

As we say at LoanLogics, “The game has changed. Play Different”. Lenders need to incorporate new strategies, while refining their old ones, to service this new generation of home buyers and continue to satisfy the needs of prior generations.

It’s a challenge. Are you up to it? The mortgage lenders I know from the past surely were and I’m sure they will be again. How about you?

About the Author

Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.