Mortgage lending for the new generation
Many factors are impacting the dream of homeownership for younger buyers today.
It’s no secret the mortgage industry has seen its fair share of ups and downs over the past two years, with lenders navigating the shift from a hot to an increasingly uncertain market amid rising rates and looming recession. Lenders are also experiencing a shift in first-time homebuyers’ mindset.
Pages have been written about millennials and Gen Z, but much goes into an individual’s psyche and decision-making. Statista reports that between 2018 and 2022, the share of U.S. millennials who expect to always rent their home increased from 13.3% to 24.7%.
“Following the 2008 financial crisis, younger generations saw parents losing their homes or fighting foreclosure. This led to some indifference, even reluctance to home ownership,” notes Jerry Reed, CEO of CUES Supplier member Member First Mortgage, a credit union service organization based in Grand Rapids, Michigan. “As a result, many of these individuals opted to rent instead of dealing with the stress of buying and maintaining a home.
“[But] there are signs the tides are turning toward homeownership,” says Reed. “Younger buyers are finally at an age where they’re forming households, starting families. Contrary to previous polls, millennials want housing to raise those families.”
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