Ah, the elusive millennial homebuyer. Our industry has spent most of 2014 analyzing why this demographic hasn’t bought a home (Student debt? Unemployment? They want to rent?) and even more time researching millennial goals and beliefs to forecast what’s next for housing.
In fact, it’s hard to come across any housing story (include this one) that doesn’t mention the importance of millennials. The choices they make — rental or homeownership — will direct the immediate future of housing.
But, how do we crack the code to reach and help millennial homebuyers?
According to research by Zillow, adults age 22 to 34 are more eager to own a home than older Americans. In addition, the Demand Institute found that 75 percent of millennials believe owning a home is an important long-term goal. One key sign of increasing homebuying interest: A Google consumer survey found that half of millennials visited real estate websites in July (up 30 percent from the previous year).
The desire to own is high; their primary challenges are inventory and home financing, according to the National Association of Realtors’ 2014 Profile of Home Buyers and Sellers. If Realtors could help eliminate one challenge for millennials, more could buy today, or at least begin the journey. We already know that the down payment is the biggest problem for first-time homebuyers, and we also know that home financing is critical for millennials. Many buyers are, however, falsely holding onto the belief that all home loans come with a hefty down payment and stringent qualifications.
Realtors have the power to change that narrative. By helping buyers investigate their down payment options, you become an advocate for today’s missing millennial homebuyer.
While recently flying a Delta 777 simulator, a few things reminded me of successful agents and brokers:
- Takeoff and landing require the same series of actions and checklists, no matter where in the world you are.
- Close your eyes and you would not know the difference between a simulator and the real thing. I was cautious and tentative at first; my 13-year-old granddaughter requested maximum turbulence. The realism made it creepy, but a lot more exciting and satisfying.
- All real estate may be local, but agents and brokers should practice with a global mindset. The same best practices work in all markets and under all conditions.
- You’re not paid the big bucks for mind-numbing hours of routine processes. Clients remember you and refer their friends because of how you handled the critical moments when everything seemed to be coming apart.
- Get outside your comfort zone; it’s the only way to grow, and makes for a more fulfilling business and life.
What can you do to start helping buyers investigate those down payment options?
- Highlight information about local programs on your website and social media.
- Connect with lenders and brokers who already know how to manage down payment program financing successfully.
- Attend trainings from your local housing finance agency.
- Help your buyers find out what programs they may qualify for first, before touring homes. The results could help expand or narrow your search.
- Share buyer success stories in your communications.
This year is going to be an exciting and rewarding one for those who understand and accept the realities of today’s real estate industry and connect their clients with hard-to-find information that helps them buy a home.
Will this finally be the year for millennials? Rents are rising, and the down payment continues to be a challenge. Crack the code to this significant segment of the population by helping millennials find their down payment.
Rob Chrane is a former Realtor and broker with more than three decades of experience in real estate and mortgage finance. He is the president of Down Payment Resource.