The mortgage industry is scrappily trying to figure out how to cater to Millennials and their evolving buying habits; however, according to John Cady, SVP National Production at Mountain West Financial, the focus should be on Generation Z.
“The problem I see with Gen Z, or Centennials, as they will probably be referred to as, is that Millennials were the first generation that wasn’t buying homes at 25,” Cady told Paydayloans247.
They have generally waited until their early 30s to buy a home.
“Everyone wants to change how we target buyers (because of Millennials) but they came of age in 2007” just prior to the recession. Which, of course, forced many to delays the purchase of homes.
Centennials, however, are expected to return to previous generations’ buying habits, according to Cady because they’re coming of age in a much more prosperous economic cycle. Meaning they will jump into the housing market earlier than Millennials were able to.
“In 2007 we should have figured out how to market to Millennials but we’re late to it,” Cady said. “We’re going to spend the next two years still trying to figure out Millennials … but those who try to figure out GenZ will succeed.”
Cady believes that’s the key to the industry’s continued success: If you figure out how to market to Centennials, you will also create system Millennials will embrace.
Centennials will require quicker mortgage transactions than are currently offered by most in the industry or they will look elsewhere – such as digital mortgage companies like Rocket Mortgage.
They also have an even greater reliance on technology than Millennials; FaceTime and text messaging are preferred over phone calls and email.
One key, according to Cady, is for originators and lenders alike to embrace programs like Day 1 Certainty, Fannie Mae’s automated DU validation service that electronically validates income, assets, and employment—automating the loan process, minimizing paperwork, and allowing for quicker mortgage closings.
And quicker mortgage closings means a mortgage experience that both Centennials and Millennials will embrace.
The industry has dug itself a hole and if it doesn’t act soon risks missing out on the next big buying cohort, according to one industry veteran.