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The 2018 Housing Market and Millennials: Are You Positioned for Success?
For years Millennials were the punching bags in real estate, always being blamed for the sluggish housing market. They didn’t want to settle down, choose careers or buy homes. However, in 2015 The Joint Center for Housing Studies at Harvard University predicted Millennials would eventually change their tune about home ownership and spur demand for first-time homes.
That prediction has turned out the be right on point. The tide has indeed turned in the last couple years, and Millennials are now getting much of the credit for the uptick in home sales and prices.
Millennials Flock to the Housing Market
According to National Association of Realtors® data, Millennials have made up the largest percentage of homebuyers for the past four years. In 2018 that percentage is predicted to be 43%, up from 40% in 2017.
On average, Millennial homebuyers are 32 years old with a household income of $75,000. The average home they purchase costs $190,000. Their average down payment is 5%. Though Millennials have led among all generations in purchases of starter homes (less than $200,000) for the past four years, 2017 saw Millennials also become the number one purchasers of middle-tier homes ($200,000 to $350,000). If the current trend continues, as NAR expects it to, Millennials will surpass Gen X (born between 1965-1980) as the main purchasers of middle- to upper-tier homes, ($350,000 – $700,000) by the end of the year.
Why are Millennials Buying Now?
Millennial first-time buyers identified the top three reasons they switched from renting to owning in 2017. They were:
- Ownership was a better financial investment
- Starting a family and having kids
- New job or better income
While these three factors will continue to be drivers in 2018, another motivator is rising mortgage rates. NAR expects mortgage rates to climb to 5% by the end of 2018 thanks to inflationary pressure and monetary policy normalization (i.e., rising interest rates).
Make Yourself Marketable to Millennials
Millennials have never known a life without the web. That’s why money has been pouring into tech-focused real-estate startup companies that want to improve the Millennial homebuyer experience.
Making the home-buying experience more palatable to Millennials isn’t just a task for startups. If you’re a Realtor or a Lender, you need to ensure you’re effectively marketing to the Millennial generation. In order to attract these clients, you should take time to examine what they’re looking for in today’s real estate market.
Millennials are all about convenience. This means technology, no beating around the bush and quick-responses. Do you actively use social media for your marketing? Is your website fresh and mobile-friendly? Do you understand the Millennial trends in choosing a home (location, amenities, colors, etc.)? These are factors that can influence whether a Millennial will choose to work with you versus a competitor. Think about the Millennial brand, and use the information you collect to strengthen your approach to this market.
What technologies were most effective in helping Millennials close their transaction? According to the 2017 Q4 Real Estate Sentiment Index released by First American Financial Corp:
- Loan approval applications/digital mortgages
- eSigning documents with an in-person notary
- Document preparation
- eSigning documents with online/remote/webcam notary
Velocity Title understands the importance of streamlining the title process to make the closing experience as easy, efficient and informative as possible. Your Millennial clients will appreciate our paperless closing technology, online ordering capabilities and being able to access their files 24/7. Partner with Velocity today and leave a great impression on your Millennial clients!
Velocity Title Moves You Forward
Velocity Title is a full-service title company offering a comprehensive line of title products and services for lenders, builders, realtors, attorneys and homebuyers. With unmatched experts and the latest technology in the industry, Velocity Title will make your job easier and your clients happy. Contact us today to learn more.