Housing for Your Generation (4 min read)

Written by: Luke Noble

The real estate industry will continuously evolve and adapt to the homeownership patterns of different generations. For your organization to capitalize on this generational diversity and maintain a competitive edge, it can be helpful to understand these unique patterns and some of the main motivational drivers among Baby Boomers, Gen X, Millennials, and Gen Z. We can help by delving into some of the opportunities that each generation presents and discuss how companies can utilize this information to thrive in a dynamic housing market.

Baby Boomers (1946 – 1964): With the highest homeownership rate among the generational categories, Baby Boomers are a force with which to be reckoned. They've accumulated valuable knowledge and experience throughout their lives and they prioritize homeownership as a primary means of building wealth. Though, according to a recent Yahoo article, when they entered college in 1982, the average tuition costs ran from $1,031 to $4,639 whereas today’s students face averages from $9,970 to $25,620, an increase of over 3,700%. It is likely that these staggering cost increases are more to blame for more recent generations’ woes rather than their penchant for avocado toast and ear buds as some Boomers like to imply.

The greater real estate industry can tap into this market by offering tailored services and products, such as reverse mortgages, home equity lines of credit, or specialized loans for home renovations and accessibility upgrades. By focusing on the unique needs of Baby Boomers, companies can develop lasting relationships with this demographic and contribute to their continued success in the housing market. Remember, these are the wonderful people that walked five miles to school, uphill both ways, without ever complaining!

Generation X (1965 - 1981): Growing up in the turmoil of the 70’s, this generation is well versed in turning challenges into opportunities (like rebranding filthy, ripped jeans and flannel shirts into “fashion”). Gen X homeownership rates might be lower than Baby Boomers, but that doesn't mean there aren't opportunities to be found serving this group. Many Gen Xers faced challenges during the 2008 financial crisis and housing market crash, but these experiences have made them resilient and adaptable (and now more likely willing to shave and put on a clean shirt).

Mortgage servicing companies can support this generation by offering refinancing options, loan modification programs, and resources for home improvement projects. By helping Gen X clients rebuild their financial stability and maximize their investments, companies can demonstrate their commitment to their clients' success and foster long-term loyalty.

Millennials (1981 - 1996): A Generation that seemingly demands room for creativity, flexibility, recognition, and fulfillment (to be fair, some also make a lot of demands). While Millennials have the lowest generational homeownership rate, their unique traits present exciting opportunities for real estate related companies. Millennials tend to carry higher student loan debt, demonstrate delayed marriage and family formation, and tend to share a preference for urban living. Millennials also face average housing prices that have increased over 393% since 1985 when Baby Boomers started purchasing. The average Baby Boomer in their 30’s paid $82,800 for their home while millennials in their 30’s paid $313,000 in 2019, and prices continue to rise. All the while, the median American household income has increased by just 17% in total since 1990. That’s only 0.5% per year. With the astronomical price and fees associated with Uber Eats and all various streaming services, is homeownership even feasible for Millennials? Of course it is!

To help Millennials overcome barriers to homeownership, companies can embrace creative and flexible financing options, such as low-down payment loans, rent-to-own programs, roommates, and first-time homebuyer incentives. Providing education and resources on credit repair and budgeting can also empower this generation to make informed decisions and achieve financial stability.

By understanding and meeting the mile long laundry list of specific needs of Millennials, the real estate industry can create a supportive environment that encourages homeownership and fosters long-lasting relationships. This should help provide a nice space for them to thrive.

Generation Z (1997 - 2013): This generation is preparing for the future and if you can get their attention and keep it longer than 3 seconds (kidding, not kidding), you can work with them too. Though Generation Z is really just entering the housing market, they represent a significant opportunity for real estate related companies. As the youngest generation, Gen Z is still in the early stages of their respective careers and financial lives, but their homeownership rate is expected to grow rapidly in the coming years. According to the Business Insider article “Gen Z is coming for the housing market”, Gen Z’ers tend to have a rosier view of real estate investing than their immediate predecessors. In a 2020 survey by Gen Z Planet, a research and advisory firm, 87% of Gen Z respondents said they wanted to own a home in the future, while just 63% of millennial respondents said the same.

To establish strong connections with this generation, the real estate industry can focus on providing educational resources, mentorship, and guidance on the home buying process. As Gen Z gains experience and wealth, they may be more likely to seek out the services of companies that have shown dedication to their success from the start. Be advised, they seem to really enjoy short, phone-based videos with TikTok dancing and choppy editing, so good luck!

All in all, by understanding the distinct needs and preferences of each generation, the entire real estate industry can develop targeted strategies that drive success in the housing market. Embracing the diverse opportunities presented by Baby Boomers, Gen X, Millennials, and Gen Z should help ensure that companies are well-positioned to thrive in an ever-evolving industry. As the proverbial homeownership torch is passed from the Boomers, maybe skipping Millennials* to Gen Z, successful companies will need to adapt with lightning speed and keep up with the hair trigger attention spans of the next generation. 

*Please note, no Millennials were hurt in the production of this blog and technically, it was written by a member of said generation and we have much love for our Millennial brothers and sisters!

Anderson|Biro is a full-service, Executive Search firm dedicated to the Financial Services sector around the country. We source talent to service all aspects of the Land Title Insurance, Settlement, and Appraisal industries. We offer quality solutions for clients in these primary fields and beyond. Our candidates are screened for specific industry experience, outstanding track records, and values that complement your mission and culture. We have also built successful partnerships with leading Homebuilders, iBuyers, Fintech, Servicers, Law Firms, Real Estate Brokerages, and Lenders with direct or indirect stakes around the real estate closing table.