Part 2: Gen X and Millennials
How does the real estate market affect generational trends in homebuying and selling, and how can real estate agents, mortgage professionals and title agents best assist each demographic? This blog series examines data from the National Association of REALTORS® (NAR) recent home buyers and sellers report through the lens of marketing research firms, to help industry professionals identify key strategies for courting customers from different generations. This blog, the second in the series, focuses on Gen Xers and Millennials. Click here for Part 1, which explores home buying and selling trends for older generations.
STRATEGY #1: Use Data to Create a Good First Impression
The NAR’s recent report reveals plenty of data for middle-aged buyers when it comes to their goals, concerns and mindset for buying and selling a home.
In the prime of life and at the height of their careers, Gen Xers (born 1965-1979) are the most likely age group to have school-aged children at home, influencing their priorities for home size, neighborhood and proximity to good school districts. With upward mobility in their careers and increased ability to work from home, Gen Xers are upgrading from starter homes to dream homes and made up the largest share of sellers at 24 percent.
Millennials (born 1980-1998) made up the majority of homebuyers in 2021 at 43 percent. Many are at the stage of life where they are financially stable, have saved up enough money for a down payment, and have or are beginning to start families — all catalysts for purchasing a starter home. Eighty-one percent of Millennial homebuyers were first-time buyers in 2021.
STRATEGY #2: Understand & Honor Customer Preferences
Each age group has different preferences for approaching the home search or selling process, communicating with professionals and exploring financing options.
According to the NAR report, Gen X buyers are looking for metropolitan areas with strong job markets, a diverse employer base and more managerial positions than the national average. They also seek highly-ranked school systems and homes that typically provide 150 more square feet than the national average.
As the first of the internet generation, Gen Xers like to do their own research online before consulting a professional and take their time to shop around for the best value. In 2021, Gen Xers visited the most open houses out of any generation, viewing a median of eight homes before making an offer.
Drawn to bigger, updated single-family homes with a typical square footage of 1,900-2,400, Millennials are also looking for multifunctional homes and room to grow. Top cities for Millennials boasted affordability and availability of homes, and above-average employment opportunities in the tech, finance and healthcare industries.
Tech-savvy and eager to do their own research, Millennials often rely on digital communication with real estate professionals, virtual tours and live streams of showings, and like to take their time shopping around and weighing their options. On average, Millennials obtained six mortgage quotes before buying, compared to three quotes for Baby Boomers. Yet, despite their use of tech tools, Younger Millennials are still using real estate agents at the highest rate (92 percent) in order to help them find the right home and negotiate transaction terms.
STRATEGY #3: Show Care and Respect
As marketing researchers can attest, a vital part of the customer experience is making sure the customer feels like more than a number – even after the transaction ends. For example, customers don’t just appreciate follow-up calls, they expect them. According to a recent accounting industry survey, 52 percent of home buyers who received a call after closing said they would be likely to use the same lender again for their next loan, compared to just 23 percent of those who didn’t get a call. Often, it’s the simplest gestures that mean the most.
There’s a reason countless Americans have relied on Old Republic Title for a century. Through changing markets and generational trends, we continue to offer personalized service and a variety of title insurance resources designed to help our customers protect one of their biggest investments. Whenever you’re ready to buy or sell your home, Old Republic Title will be there to help.
Copyright ©2022 “2022 Home Buyers and Sellers Generational Trends Report.” NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. Reprinted with permission. March 2022, https://www.nar.realtor/research-and-statistics/research-reports/home-buyer-and-seller-generational-trends