Housing affordability is top of mind as mortgage rates and home prices continue to climb and inventory continues to shrink. These discussions are even more important in cities like Nashville, Austin and San Francisco. In those cities, prices are far higher than the national average.
Two groups laser-focused on buying a home — or trying to at least — include millennials and Gen Z. These generational groups are commonly found in popular cities like those mentioned above. This puts them at a home-buying disadvantage despite their interest.
Let’s dig into these generational groups and some of the issues they face.
Winning the lottery?
According to the report by Zillow, “52% of Gen Zers and 57% of millennials who don’t currently own a home believe they’d need to win the lottery to afford one.”
Data from Altos Research shows that the median list price in Austin is $810,000. That price dips just slightly in Nashville, where the median list price of a home is $749,900. In San Francisco, that price jumps to $1.6 million.
According to the Zillow report, 25% of millennials and 20% of Gen Z respondents said that to purchase a home, they would have to move to a different city. Thanks to the rise in remote work, that move may be more possible than it would have been even just five years ago, but the sacrifices involved may outweigh the benefits of homeownership. Moving to afford a home could mean moving further away from family, friends, work or the benefits of living in a larger city like health care, walkability and entertainment.
So it’s no wonder that millennials and Gen Z feel left out of homeownership. But would they really need to win the lottery?
As agents, when courting future millennial and Gen Z homebuyers, there are a few ways you can best serve this demographic — besides helping them to rig the Powerball.
Educate them on downpayment assistance
Many consumers — not just millennials and Gen Z — still believe you need the full 20% downpayment to purchase a home.
Add information to your website on ‘debunking home-buying myths’ or information specific to down payments. Guide your first-time millennial and Gen Z homebuyers to those pages.
If you have a growing social media presence, consider dedicating a few posts to this topic as well. Many first-time buyers are finding their agents and mortgage brokers online and on social media, today. Keeping vital information — like downpayment assistance programs and downpayment and mortgage information in general — at the forefront will show buyers they can trust you.
Use the right communication tactics
If you want to reach millennial and Gen Z homebuyers, then you need to meet them where they are at. Start texting! Texting is easy and quick communication that feels low pressure. It allows you to easily send listing links and you can always call your clients for those detailed conversations later in the process.
Nurture your affiliate partner network
For a bit of behind-the-scenes work, remember to keep a strong partner network. Your millennial and Gen Z buyers will likely not yet have a mortgage lender or a home inspector lined up. If you have partners in the community that you trust, recommend them! As you know, referrals keep the business going. It is more than talking the talk online. When you set homebuyers up with a good team, you are walking the walk too.
As real estate agents struggle to find sellers willing to give up their low mortgage rates, turning to first-time homebuyers may be the solution to the lack of business you’ve experienced in the past few months.
The homeownership dreams of younger generations won’t require a lottery win, just a great team of agents and real estate professionals who have their backs.
