TheMReport — News and strategies for the evolving mortgage marketplace.
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24 | TH E M R EP O RT FEATURE I f you want to get the attention of a mortgage lender today, simply say "millennial generation," and ears will perk up. Millennials are already a major force as con- sumers and have the potential to become a force as homebuyers as well. It's no wonder mortgage companies are scrambling to attract millennial borrowers. However, not as much atten- tion has been paid to recruiting millennials to the mortgage indus- try, which is equally important for a variety of reasons. After all, the industry is aging; plus, who knows better how to sell to mil- lennials than other millennials? But this is where things get tricky. Lenders should not make the mistake of believing they can attract younger borrowers simply by hiring younger loan officers. It's not that easy. As employees, members of Generation Y have career needs that differ from previous generations. At a time when many mortgage lenders are adding loan officers to take advantage of an expanding purchase market, serving mil- lennial borrowers and recruiting millennial salespeople are unique challenges that need to be ad- dressed separately—but how? The Greatest Generation of Homeowners? R ecently, millennials—whom the U.S. Census Bureau defines as those ages 18–34—sur- passed baby boomers as the nation's largest living generation, according to population estimates released in 2016. Their numbers stand at 75.4 million, topping the 74.9 million baby boomers—those born between 1946 and 1964. But are they buying homes? It depends on whom you ask. The common story on millennials is that they are not following in the footsteps of previous generations when it comes to homebuying. Many are more interested in renting or are living with their parents. Many are burdened with student loan debt. And many came of age when the housing market was collapsing and think the same thing could happen to them. Basically, millennials aren't inter- ested in buying homes, this narra- tive goes. As it turns out, that's not really the case. In fact, millennials have been the largest group of recent homebuyers for four straight years, according to the National Association of Realtors' 2017 Home Buyer and Seller Generational Trends study, which evaluates the generational differences of recent homebuyers and sellers. Not only that, but compared to other home - buyers, millennial buyers were the most likely group to see their purchases as good investments, the study found. Another recent analysis by the personal finance website NerdWallet also dispelled our com - mon perceptions of millennials as homebuyers. Examining a number of surveys and data from govern- ment agencies and private organiza- tions, NerdWallet found millennials look upon owning a home just as favorably as their parents and grandparents and the majority would prefer owning to renting. With such positive news about millennials, lenders really don't have anything to worry about, right? Not so fast. For one, NerdWallet's analysis found that while they look upon homeown - ership favorably, many millennials appear to be postponing home- ownership because of real and perceived difficulties in affording all associated costs. That means lenders have their work cut out for them in terms of breaking up false perceptions and educating millen- nials on getting ready to buy. Another concern is that millen- nials shop differently than older consumers. According to a recent Zillow report, most millenni- als prefer to use online financial tools as a first step to buying a home and are more likely to apply for their mortgages online. Specifically, Zillow found: • 91 percent turn to the Internet, • 68 percent use online financial tools as the first step, and • 58 percent consult their personal networks. Millennials don't do every- thing online, however, when you consider 58 percent consult their friends and family before buying. The takeaway here is that lend- ers should incorporate an online strategy to appeal to the millen- nial borrower—yet lenders must also think of the people whom millennials trust and whom they go to for advice on large financial decisions such as buying a home. Recruiting Millennials—and Keeping Them I t's clear millennials are a force to be reckoned with when it comes to homebuying. It only makes sense they might be more comfortable with a company— and a loan officer—that thinks and acts the way they do. That's one of the reasons mortgage com- panies want to add millennials to their workforces, and they would be wise to do so. But it's not the only reason. The average loan officer today is in his or her early to mid-50s, a fact that poses a significant con - cern to lenders. As older loan officers age out of the profession, mortgage com- panies will need to recruit more young professionals in order to continue to fuel production. But just as lenders need to evolve to attract millennial borrowers, they must also consider what millen- nial workers are looking for in an employer. One bit of good news for lend- ers looking to recruit young loan officers: This is a population that is clearly on the move careerwise. According to a 2016 Gallup report on millennials, 21 percent had changed jobs in the past year, and only half planned to be work - ing at the same company one year from when they took the survey. The reason? Gallup found 55 percent of millennials did not feel engaged in their jobs and felt indifference toward their work. That statistic may sound like a sad statement on millennials. But Gallup researchers noted it's possible millennials don't want to leave their jobs—they just want worthwhile opportunities. Generally speaking, the career priorities of millennial profes - sionals are different than those of previous generations. Research shows millennials are less focused on job titles—and sometimes even pay—than they are on the ex - perience. Employers need to ask themselves: Does the opportunity I'm offering provide a challenge? Will I take their ideas seriously? As for mortgage companies, it seems most could do a better job at recruiting and retaining millennial talent. "The industry does seem to recognize the need to adjust recruitment practices, as well as branding and mar - keting strategies," said Kristin Messerli, Founder and President of Cultural Outreach Solutions, which provides millennial and multicultural consulting to the "It's clear millennials are a force to be reckoned with when it comes to homebuying."