Millennials - Settlers...

Millennials: Obstacles, Opinions

& Opportunities Presented by:

Jack Long

MGIC Sales Manager

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The information presented in this presentation is for general information only, and is based on guidelines and practices generally accepted within the mortgage finance industry and is not intended to be all-inclusive. MGIC makes no representations or warranties of any kind with respect to the accuracy, completeness or suitability for any purpose of the information contained in this presentation. MGIC expressly disclaims any and all warranties, express or implied, including without limitation warranties of merchantability and fitness for a particular purpose regarding these materials and this presentation. In no event will MGIC be liable for any direct, indirect, incidental, punitive or consequential damages of any kind with respect to the presentation or materials provided. All examples are hypothetical and are for illustrative purposes only. This presentation is not intended and should not be interpreted or relied upon as legal advice. We encourage you to seek advice from a qualified professional.

Legal Disclaimer

Where’s the First-Time Homebuyer?

Factors that affect housing demand

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1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

The Increasing Cost of Renting

Median Asking Rent

1988-2013

Census Bureau 2014

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Why is everyone always talking about Millennials?

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5 million more members than Baby Boomers

in 70s!

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Largest demographic to

ever enter the nation’s

housing market

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Generation Y or GenYers

Millennials

FOMO Generation

Net Generation

Echo Boomers

Boomerang Generation

Peter Pan Generation

What’s in a name?

Percent of demographic married by age 28:

Baby Boomers 42%

GenXers 29%

Millennials 21%

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18% Of first-time home

buyers are single females.

Source: NAR Profile 2015

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36.4% Of single women age

18-34 live at home with

parents or other relative

Source: Pew Research Nov. 2015

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Income is rising

Source: Fannie Mae National Housing Survey August 2015

Unemployment Nov 2015 by age group

25 – 34 = 5.3%

20 – 24 = 8.9%

U.S. total = 5% Source: Bureau of Labor

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More Millennials have an M.B.A. than have no

higher education at all Source: PayScale.com

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In 1960 5% of

women 18-34 were

enrolled in college.

In 2015:

27% Source: Pew Research Nov. 2015

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60% of college-educated Millennials

report annual income of $50,000

or more

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Millennial

Behavior

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Non Mortgage Debt

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

HE Revolving Auto Loan Credit Card Student Loan Other

Trillions of Dollars

Total Debt Balance and its Composition

Source: FRBNY Consumer Credit Panel/Equifax

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“If you don't read the newspaper, you're uninformed.

If you read the newspaper, you're mis-informed.”

- Mark Twain

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38.8

28.5

18.5

10.1

4.2

% Borrowers by Balance in 2014

$1 - $10,000

$10,001 - $25,000

$25,001 - $50,000

$50,001 - $100,000

Over $100,000

Distribution of Student Loans

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0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2005:Q4 2006:Q4 2007:Q4 2008:Q4 2009:Q4 2010:Q4 2011:Q4 2012:Q4 2013:Q4

no student debt with current student debt

with current student debt of 100K+ with 90+ delinquent student debt

with student debt, current or delinquent

Source: New York Fed Consumer Credit Panel / Equifax

Share borrowers age 25 - 30 years old with new mortgage originations

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18

20

22

24

26

28

30

32

34

36

2013

Perc

ent

Proportion with home-secured debt at age 30

Have Student Loan ages 27-30

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18

20

22

24

26

28

30

32

34

36

2013

Perc

ent

Proportion with home-secured debt at age 30

Have Student Loan ages 27-30 No Student Loan ages 27-30

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Federal Student Debt Repayment Plans

• Standard • Extended • Graduated • Income-Driven • Consolidated

47% Of student loan

borrowers appear to be in deferral or

forbearance periods.

Source: FRBNY

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86%

Homeownership provides protection

against rent increases

80%

Homeownership is an

investment opportunity

that builds long-term

wealth

77%

Homeownership

provides stability and/or

financial security

financial aspects

Source: Freddie Mac

Renters’ Views on Homeownership

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$2,090 $5,210 $5,600 $6,200 $6,100 $5,150

$36,450 $49,500

$83,760

$194,170

$277,590 $272,700

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Under 25 25-34 35-44 45-54 55-64 Over 65

Renter vs. Owner

Source: Joint Center for Housing Studies of Harvard University 2013; Dollars; 2010

Median Net Worth

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It is something to be proud of 91%

It can be passed on to your children 90%

It allows more flexibility to design it the way you want 89%

It gives you more privacy 86%

It gives you more independence and control 81%

It provides a better home life for children 76%

It is a sign of success 76%

It makes you feel more like part of a community 74%

It allows you to live in a better, safer neighborhood 60%

Source: Freddie Mac

Non-financial aspects

Renters’ Views on Homeownership

Where’s the First-Time Homebuyer?

Millennials Are Heavily Influenced By Their Peers

• I usually make the right decisions when I have the information I

need.

• People often come to me for advice

• When my friends agree with what I want to do, I feel more

excited about doing it.

• I usually don’t make a major decision until I have discussed it

with a few people whom I trust.

87% 85%

58% 70%

48% 70%

52% 68%

Millennials Shop Collaboratively

• 32% rely on company websites and reports for input.

• 33% rely on Professional reviews.

• 38% rely on consumer online reviews and blogs

• 42% rely on coworkers or classmates

• 65% rely on friends and family members.

• Every category is consistently higher than non-

millennials.

Millennials prefer and are using technology to

shop!

• Millennials are 262% more likely than the average shopper to

be influenced by Smartphone apps,

• 247% more likely to be influenced by blogs or social

networking sites, and

• 216% more likely to be influenced by in-store touch screen

displays

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58% of smart phone users

don’t go 1 hour

without checking their

phones!

68% of those 18-34

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Millennials are slightly more likely than older

shoppers to write a product review or complaint

But…….

Their reviews or complaints are going viral. Going out to

potentially thousands rather than to just one person in the

complaint department!

What’s your Brand? Millennials are probably

already talking about you!

• Sometimes “good “, sometimes “bad”

• Do you know what they are saying?

• Are you actively responding?

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0

100

200

300

400

500

600

700

12-17 18-24 25-43 45-54 55-64 65+

Nu

mb

er o

f Fa

ceb

oo

k fr

ien

ds

Source: Statista, as of February 2014

Average number friends of users in the United States, by age group

Facebook Friends

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74% “know and understand

the financial process of buying a home”

44% believe 20% down

payment is required

Source: Wells Fargo, Sep 15, 2014

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23% Saving for down payment most difficult task

Source: NAR Profile of Buyers & Sellers 2014

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44%

62% 58%

Age 18-24 Age 25-34 Age 35-44

Source: Freddie Mac

#1 Reason Renters Won’t Buy

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56% Renters who prefer to own but are not currently pursuing it

because it would be too difficult to get a mortgage

Source: Pulte Group May 2014

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74% Who fear they wouldn’t qualify admit they

haven’t taken the steps to see if they would

Source: Pulte Group May 2014

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The Wave of First-Time Homebuyers

Born in 1985 & will turn 31 in 2016

Most Millennials just entering first-home buying years

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What do I know about Millennials?

I learn something new

every day!

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@mgic

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jack_long@mgic.com

www.linkedin.com/in/jacklong2

Thank You!

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