Millennials may not dominate as much of the housing market share as previously thought in smaller markets, according to a recent survey conducted by The Association of Mortgage Professionals.
The survey, which questions its members on a monthly basis in order to determine trends in the mortgage industry. For this particular study, different generations were defined as such: millennials, under 35 years old; Gen Xers, 36 to 52 years old; Baby Boomers, 53 to 71 years old; and Greatest Generations, over 72 years old.
The findings showed that Gen Xers actually made up most of the market share, at 36 to 75 percent. Over a quarter of respondents reported that they comprised anywhere between 50 and 75 percent, opposed to millennials, which were accountable for less than 25 percent in over half the mortgage businesses surveyed.
Further, millennials aren’t as interested in high down payments as Gen Xers. Forty percent of respondents reported former preferred down payments of 3 percent or less, while the latter were partial to down payments of 10 to 20 percent.
“There’s a big focus on millennials, but in reality, the majority of borrowers are still over 36 years old,” said Fred Kreger, CMC and President of NAMB. “For small mortgage businesses strategizing on getting a bigger piece of the pie in a shrinking market, it’s important to consider that most of today’s business comes not from millennials, but from non-millennial Borrowers.”
One thing respondents could agree on was that potential borrowers wanted a more streamed line process, which translates to digital mortgage processes. In fact, fewer than 20 percent said they had clients that desired more paper. Further, forty percent said that they didn’t feel like smaller mortgage lenders were in direct competition with each other. Rather, they felt like the Big Five banks were their largest competition.