Changing Attitudes

Millennials may have a clear preference for immediate communication, but that doesn’t mean they are hasty in their decision making or lazy when it comes to compiling information. Baby Boomers are often more willing to spend time writing an email than their younger counterparts, but Millennials will do more legwork in terms of finding information on the Internet. Realtor.com found that homebuyers from all generations tend to start their searches online before contacting an agent, but Millennials also study the homebuying process before getting in touch with a Realtor. They are more likely than their elders to find the home that they purchase through online searches rather than through an agent.

Agents may have to get used to their Millennial clients doing some of the legwork on their own. A strong sense of self-reliance characterizes many, according to the Pew Research Center’s 2014 survey of Millennials. When asked whether most people can be trusted, only 19 percent of Millennials replied “yes,” compared to 31 percent of Generation Xers and 40 percent of Baby Boomers.

Word of mouth is very important to Millennials, whether it comes from a friend or from an online review. They like to check things out before making a commitment. They will opt for Realtors who have a prominent online presence and positive reviews over those who do not, whereas older clients are more likely to make contact after seeing an advertisement, according to a recent study by Radius Global Market Research.

The record low rates now available for 30-year fixed-rate mortgages – averaging below 4 percent in 2012 and 2013 – offer incentive for Millennials to buy homes. However, many continue to hesitate. Coming of age during the worst economic downturn since the Great Depression has helped make Millennials cautious and frugal shoppers. They tend to avoid trends and disposable purchases, often opting to save their money for experiences and things that last, such as homes. They seek out agents who can help them do the homework before committing.

Many also saw their parents struggle to hold on to their homes during the recession, and may be reluctant to commit to buying a house unless the price is right. This may mean forgoing a large home in favor of something smaller that they can afford.

In this sense, Millennials have learned from the example set by older generations, who showed a willingness to take on a mortgage with a relatively high mortgage rate. Many Boomers entered their 30s during the late 1970s and early 1980s, when rates fluctuated between about 8.9 percent and 16 percent. That generation banked on the belief that their homes would increase in value as they aged. Their investment in their mortgage payments would be returned when it came time to sell the home and move into something smaller. Or so they thought. Millennials saw that belief crumble during the housing market crash.