There's money in them thar Milennials, it just is going to take some time. By 2025, according to the Harvard's Joint Center for Housing Studies, Millennials who are finally kicked out of the basement will create 24 million new households. However, we mortgage bankers are not the most patient bunch. We also have a wide disconnect with them as we for the most part are baby boomers 50+ and they are 18-33 yrs old. A lot has happened in that 20 year gap. Technology has had a disconnecting affect not seen since the car. We don't know how to connect with each other and aren't sure what the other generation wants; we just know it’s different than what we want or wanted at each others ages.
We wonder why the Milennials don't want to leave the house. But they grew up in a world of immediate gratification and experienced more before 14 than we did by 34. While it is true that much of that experience was virtual, to them it is real. They have less patience and are more focused on the end products than on the steps to get there. They think the steps are "old school" and see wealth made by high tech wiz kids at ages not seen by baby boomers. They see parents stuck with years of hard work poured into a house that hasn't been a good investment, while burdened by a mortgage that looms hauntingly every month.
Baby Boomers openly admit their children won't be able to have the same financial opportunity we had. Their children want to live in the home town they grew up in, assuming they were fortunate to grow up in a town they liked. But these Milennials are stuck with home towns that are unaffordable, lower paying jobs, much higher student loan debt and strongly enforced credit policies. Now there are affordable homes out there just not in their home towns or near cities with the best employment opportunities. The idea of long commutes (waste of their valuable time and killer to the environment) or living in "uncool" communities (no Starbucks or good Organic smoothie place) is not worth it. So living at home is their only shot to enjoy the standard of living they have come to enjoy (and secretly encouraged by helicopter parents) and be near friends, cities and Starbucks.
We, along with our partners in the real estate industry, need to plant the seeds of change in the minds of Milennials, and their parents, now. We need to get out the message that it is vital for each generation to grow in their own space at the right times in their life span. They have to believe it is personally and financially healthy to have that experience of being in the right home at the right cost at the right time of their life. We have to change the YOLO mentality that keeps kids from saving and making plans for the future, to the You Only Live at home once drive for independence. We need to market to our databases of Baby Boomer parents the importance of education and planning for their children to get on the road to homeownership. Parents can redirect their enabling position of "free landlord", to investor, encouraging their child to pay $1000 a month towards their debt and/or savings to buy the house and if the parent is flush enough, they can offer to match some percent of that as a gift when it comes time to buy.
Some tough love and encouragement from the parents coupled with advice from trusted, Realtors, Mortgage bankers and Financial Planners can inspire these Milennials into the return of a healthy economy and positive trend in household formation. Millennials don't want to hear from their parents "why can't you do it like I did?” this generation knows how much harder it is and how success in homeownership is no given post Housing Crisis. We can deliver that message realistically in their stead, but we need to speak their language.
The message has to find its voice through social networks that are hyper local. Finding that way to connect with those who have strong voices in these social networks helps you understand how to make you and your message more relevant and likely to be heard. Some of the most popular shows today among Millennials are on HGTV. They love to see people find their opportunity, see the potential, then make it their own for short money. Connecting that entrepreneurial sweat equity attitude to their local area can turn the tide. Creating content about young success stories in your worlds where peer Millennials found a way to get themselves into the housing market, then repeatedly sharing it with influencers who can get the message out is key. Being an evangelist and creating others will help change the tide of homeownership for young adults while positioning you as an authority and influencer.
Stay away from selling loans and sell the power and fun of homeownership. The access to credit is the same as when their parents bought their first home. Sure its tighter than when they overextended and bought that monster home they are living in now, but it's the same market with 3.5% gift FHA/ 0% down VA/0% down Rural/0-5% down State Bond and 5% down Fannie Mae and rates are in the 4's which is lower than most of the boomers got in the 70's. We need to sell the fun of getting in on the ground floor of a new and up and coming neighborhood, fixing up a home (it's 203K/Homestyle time!), and building equity where people saw none. Helping customers to post videos and pics telling their story is far more powerful than you showing an APR. Baby Boomer Mortgage Bankers need to partner with their younger tech savvy realtors and title people, and maybe hire an assistant from that generation, to make that connection.
The largest and growing majority of these Milennials living at home are minorities. By 2025 they will make up 46% of those aged 25-34 and therefore half the typical first time buyer market. Too frequently their parents were under-informed and harmed by the housing market, leaving a sour taste in their families’ mouths. A concerted effort to educate, inform, and inspire the Millennial minorities using the social network platform of today is vital to our housing economy's health. The rental property industry has enjoyed boom times from these Milennials with high demand, rising rents, booming construction and double digit value growth for the fourth straight year. Its time we redirect this generation towards homeownership. There are no more refi booms, or government housing handouts coming our way; tapping into this next generational wave is the answer for those who want to be in this profession.
So lets change the tweet to "You Only Live Once, so why not own a place of your own!"