Millennials make up 66 percent of all first-time homebuyers, and account for roughly 34 percent of total home buyers in today’s market, according to INC. However, the rate at which millennials are purchasing homes is slower than generations past. Specifically, homeownership is roughly 8-9 percentage points lower than rates from previous generations at the same age.
Experts say increased debt, changing life goals and unique cohabitation arrangements may play a role in the sluggish homeownership trend. Still, owning property is a key investment for generating wealth, which means it’s critical for realtors to encourage millennials to rethink their approach of being life-long renters.
To do so, realtors must reimagine their messaging to attract and grow a pipeline of millennial buyers. As it turns out, inspiration-based messaging may be an effective strategic way.
Be a Credit Hero
Millennials face more debt that generations past. For many millennials, their professional lives got off to a slow start as the economy rebuilt from the 2008 recession. Simultaneously, an increase in student loan debt for this generation makes for an unfortunate financial combination that has impacted many millennials’ credit scores.
Specifically, the Federal Reserve Bank of New York said that from 2006 to 2017, the total outstanding student loan debt in the U.S. increased by 170 percent, and the average student graduates with $34,000 in student loan debt, an increase of 70 percent from the same time period.
The problem worsens when someone misses their student loan payment, as it has a direct correlation with their credit score. The increase in debt may play a direct role in homeownership. In fact, out of 6,400 millennials, 37.7 percent cite they are unable to buy homes because of their current credit score.
Realtor marketing plan: Don’t pile on to the financial misery as a realtor who can’t qualify your clients. Rather, diversifying your product list and offering credit repair services to evoke hope and a clear path to financial success can be a winning marketing strategy. By helping your prospective homebuyers with credit repair you can deepen your pipeline with qualified leads, and generate revenue as they work their way up toward homeownership.
Affording the down payment is a major roadblock for millennials hoping to attain homeownership. While the monthly mortgage and other homeowner fees may be attainable, coming up with a chunk of change to put down on a home, especially in high-cost markets like San Francisco or New York, can be part of the challenge.
To help empower your clients, discuss co-investment opportunities. There are a number of organizations that co-invest in homes and down payments so that first-time homebuyers can attain homeownership. The caveat here is that when the homeowner sells their property, a portion of their profits will go back to the investor, however, this is an option that can help more millennials get into their first homes.
Realtor marketing plan: Qualifying more leads for homeownership — by eliminating roadblocks —is a great way to help your community continue to flourish, and helps provide your clients with a deeper credit profile, continuing to help their financial future.
Zero In On Long-Term Investment Strategies
Maybe you caught wind of the latest board game from Hasbro called ‘Monopoly for Millennials’. Rather than selling real estate, the game focuses on selling ‘experiences’ which is a jab at this ‘Yolo’-driven, ‘experiencing having’ demographic. The game stems from a stereotype that millennials are spending their money on experiences that focus on the ‘now’ versus making wise investments that help them in the long-term.
In fact, 34 percent of millennials say they haven’t moved forward with homeownership simply because they aren’t ready to settle down in one city. The preference for flexibility is delaying homeownership, but also ignoring how the investment can provide longer-lasting flexibility later in life.
Realtor marketing plan: Position your realtor messaging to appeal to an experience-based demographic, but focusing on how long-term investments can fuel and sustain their adventurous spirits for a longer period of time. Encouraging millennials to learn more about wise investment strategies can be a great niche for your existing real estate business.
Align With Older Millennials
Another trend with millennials is the concept of delayed marriage. Previous generations entered homeownership sooner but also started families earlier, which are correlated.
In 1970, the median age for marriage was 23 for men and 21 for women. As of 2017, the median age of marriage is 29.5 for men and 27.4 for women. And while there are solo homebuyers in the market, being married actually increases the probability of owning a home 18 percentage points, and 28.1 percent of millennials say that they want to get married or find a long-term partner before buying a home.
Realtor marketing plan: Well, you could always start a dating service... Or, you can reimagine your marketing messaging to align with older millennials, and specifically focus your niche to those who are just getting started and who may need help visualizing what life in a new home looks like, and how it can provide stability for their growing family.
Curb Buyer’s Remorse with Due Diligence
Underestimating the hidden costs associated with buying and owning a home, including the ongoing responsibilities of maintaining it, is the number one millennial homeowner frustration according to a recent Bankrate survey.
Misaligned expectations can fall directly on the shoulders of a real estate agent who didn’t do their job to properly match a home with their clients. Rather, it’s critical, as a real estate professional to save them from making a bad decision in the first place.
Real estate agents should take a comprehensive look at their client’s finances, and guide them into a home that meets their needs.
Realtor marketing plan: Help your clients with financial literacy. Show a holistic breakdown of what it costs to be a homeowner, and provide realistic suggestions for homes your clients can buy in order to save them from buyer’s remorse. Just because your clients qualify for a loan, doesn’t mean their purchase is a wise one.
Final Notes: Realtor Marketing Has Changed
The bottom line is that real estate marketing is less about selling, and more about offering genuine assistance that helps your clients not only reach the milestone of owning a home, but can touch on multiple value points of their life whether that’s their need to experiences, desires to get out of debt, or reeducation about wise investments.
By acting as a resource to your clients, you can continue to build your pipeline, while creating lifelong relationships with those you’ve skillfully guided into one of the most important investments of their lives.
Want to learn more about helping your millennial clients obtain homeownership? See how you can become a credit hero today.