Love it or hate it, you surely can’t deny it: millennials are all the rage.
Advertisers love them. Companies want them. The on-demand economy was created because of them. And there doesn’t seem to be a single publication that gets tired of writing about them.
But why do they matter so much? The answer: millennials have buying power. A lot of it.
As I’ve mentioned in the past, millennials — the largest generation in history — are poised to become an influential force in the housing market, changing everything from the style of homes constructed to the mortgage application process. But it’s not just housing that’s going to experience a groundswell of attention from this digitally-savvy cohort.
Every industry will.
In a report that casts millennials as the “global guardians of capital,” researchers with UBS, a global investment firm, estimate that by 2024 global millennial wealth will stand at $24 trillion, about one-and-a-half times the size of the U.S. economy in 2015.
Plus, the oldest millennials are preparing to enter their peak income, investment and spending years as they climb the career ladder, form families and begin to settle down (millennials were 42 percent of homebuyers last year, according to Zillow). They’re paying down student debt, moving away from home and starting their own businesses or taking higher-paying jobs. Like their parents before them, they’re heading for the suburbs and buying sports utility vehicles to accommodate their growing families. And although wage growth remains sluggish overall, millennials are coming of age at a time when the economy is recovering and consumer confidence is on the rise.
Millennial tastes and preferences are fueling the economy. So, instead of lamenting how times have changed, it behooves us to get to know this generation and how they do business.
It’s true that millennials crave convenience, multi-channel delivery options and transparency from the brands they trust. But what some purported experts fail to understand is that millennials are not more narcissistic or obsessed with technology than other generations, according to UBS.
In its report, UBS suggests that human behavior, such as the desire to stay current on the latest news or the need for convenient transportation, hasn’t changed. It’s just the mode of delivery that looks and feels different.
Millennials may be driving the demand for digital but those expectations are now evident among all age groups. The habits and behaviors of millennials are influencing the habits and behaviors of other generations flush with cash: baby boomers and Generation X’ers.
How does this relate to housing? Just consider Movement. Our brand is uniquely positioned to meet the needs of a millennial audience and the generations taking cues from it. We make the mortgage process less of a hassle and more accessible.
If you’re a loan officer looking to close deals with this burgeoning demographic, make sure your prospective borrowers know about the Easy App. Tell them about our Movement Assistance Program (M.A.P.). Help them understand that they can apply for a mortgage from the comfort of their living rooms, and that they don’t have to go it alone to finance a down payment.
Your efforts won’t just help you land millennial clients but it will make you appealing to other borrowers looking for the same level of service.
Home sales falling short
Sales of both new and existing homes fell in July, raising concerns about the housing market’s continued recovery. New home sales declined 9.4 percent last month, hitting their lowest level since December. Existing home sales tumbled 1.3 percent to an 11-month low.
The data comes just a week after the Commerce Department said housing starts and building permits also unexpectedly fell.
Blame the slowdown in sales on the shortage of housing stock. The low inventory is limiting sales potential even as demand continues to soar. Add that to the rise in home prices, and it’s clear why buyers may feel squeamish about entering the market.
So what do you tell your borrowers in an environment like this one? Remind them that rates are still lower than they’ve been in a long time and, if they’re considering buying a home, now is still a great time to do it.
Fed chair: Financial system much safer now
In what could be her final speech as leader, Federal Reserve Chair Janet Yellen said Friday that the U.S. financial system is much safer now than it was a decade ago, although regulations may still need to be modified.
Yellen delivered her comments during the Fed’s annual gathering in Jackson Hole, Wyo. Billed by industry pundits as a “meeting of the minds,” the retreat will gives central bank presidents an opportunity to weigh this year’s sluggish inflation data and try to solve the puzzle of why it remains so low even as unemployment has dropped.
But most observers are keeping their eyes on Yellen, whose status as Fed chair after her term expires in February is up in the air, much in part because of mixed signals from President Donald Trump. Should Trump decide not to reappoint Yellen, there’s speculation that a new chair will come from within the Fed’s ranks and possibly overhaul how the Fed sets monetary policy.
Yellen has said that she’s keeping her focus on guiding the Fed to a normalized stance and making the first steps to unwinding its $4.5 trillion balance sheet of bonds and treasuries.
On Friday, she didn’t offer much in the way of future monetary policy, instead choosing to focus on the history of the financial crisis and what policymakers have done in response. She said future crises are likely but that regulators have learned valuable lessons from the meltdown.
Also of interest Friday is the appearance of European Central Bank President Mario Draghi, who last attended the conference in 2014 and heralded the eurozone’s bond-buying (or quantitative easing) program.
If the European Union winds down its QE program, it would realign the world’s two most influential central banks for the first time in four years. If the ECB begins reducing its purchases of bonds, it could inadvertently nudge interest rates upward. And since the U.S. is part of the global activity, any sort of rate activity that ripples through Europe can affect us here, too.
Still, it seems doubtful that Draghi will offer any substantial comments on policy changes in the eurozone. A report from Reuters quotes two unnamed sources as saying that Draghi likely will not use the retreat to indicate his plans to shift monetary policy. Either way, we should keep our attention on what develops from the meeting because it’s bound to give us some gauge of how the Fed will move the rest of the year.