Born between the early 1980s and late 1990s, millennials are no longer watching SpongeBob or ICQing on the World Wide Web: they have graduated from school, started careers and families, and are eagerly looking to purchase their first homes.
But with millennials entering the home-buying market, a unique set of generational and real-estate trends has emerged and poses some clear challenges when it comes to marketing mortgages to millennials.
On one hand, while they may be the most educated generation, the average millennial is saddled with almost $40,000 in student debt and stagnant salaries. On the other, the current real estate market is a seller’s dream, by all measurements – list prices up, double-digit growth, supply down, bidding wars.
So it comes as no surprise that millennials are hard-pressed to make the jump from renting to buying: nearly one-third of first-time homebuyers haven’t been able to find a home within their budget.
That said, none of this is stopping millennials from jumping into the fray; instead, they are a willing and eager sector ready to listen to messaging on mortgages and home buying.
However, one of their unique characteristics is that millennials learn about mortgages and hunt for houses much differently than previous generations. Given that their buying habits influence will shape the real estate market for decades, it is crucial for marketers to understand just where millennials are coming from.
The video generation
As “digital natives” – the first cohort of the digital age that grew up with the internet – millennials are knowledge-hungry, digitally-savvy, and know exactly what they want. They have always and will continue to spend a lot of time-consuming and engaging with a wide variety of online content, whether as sources of news, education, entertainment, or social media.
Statista reports that, outside of work hours, millennials spend an average of 287 minutes online a day– nearly 5 hours!
In these trends, the power of video needs to be singled out. In 20 years, we’ve seen a huge rise in the production and consumption of video, and the numbers are staggering: adults spend an average of over 40 minutes a day watching YouTube. In total, that’s over a billion hours of videos per day.
We need to remember, however, that this is not only for entertainment purposes. Compared to generations before them, millennials consistently rely on digital technology, social media, and video content to make purchase decisions. Video is their “social proof” of a product’s worthiness and justifies their purchase.
And we start to see this reflected in wider trends:
72% of consumers would rather use a video to learn about a product or service than any other channel.
Millennials’ generational uniqueness as digital natives has shaped their entire worldview, and this cannot be overlooked when strategizing any marketing campaign, up to and including mortgages.
The personal generation
Digitally-savvy millennials grew up watching companies embarrass themselves in countless marketing fails trying to endear themselves to consumers, so it’s no wonder they’ve grown suspicious and less trusting of brands.
Rather than be sold on the traditional or impersonal tactics of corporate marketing, millennials eschew the “one size fits all” approach and are much more in tune with marketing efforts that personalize content to their specific needs, talk to their real experiences and tell compelling stories.
With this has come a huge shift in consumer behavior. Millennials increasingly expect that companies be more customer-centric – and will punish companies that are not:
43% of consumers in the US and Canada said they’ve stopped doing business with companies that did a poor job personalizing the customer experience, up from 25% who said the same in 2019.
And financial institutions are starting to feel the crunch. Expedited by the recent pandemic, 59% of consumers said the pandemic increased their expectations of financial institution’s digital capabilities, Yet many banks and credit unions did not respond to this opportunity. Only 27% of consumers feel the financial services industry is customer-centric. Even fewer (23%) believe the industry handled the pandemic well.
So what does this mean for the real estate industry?
Simply, young home buyers prefer to be educated on purchasing decisions through video content that tells authentic, compelling stories and that are personalized to their needs and desires.
This is how you market mortgages to millennials.
How to connect with video when marketing mortgages
Content about mortgages can easily get confusing and overwhelming, but using video can turn this into an advantage for marketers. We already know that millennials spend lots of time online and prefer video to learn about complex topics and make purchasing decisions. This means you can create video content that simplifies mortgage information, breaking down numbers, answering FAQs, or showcasing success stories of other millennials who have successfully purchased homes.
Used this way, video content can reduce mortgage-related stress, simplify the complex details of becoming a homeowner and facilitate a purchasing decision – all delivered in a way that appeals to both the financial sense and general worldview of millennials.
With their finely tuned BS radar, millennials can sniff out fakers and have no problem turning away from companies who care more about sales than people. You need to position yourself as not only an expert source of knowledge but also an authentic one. One successful way of doing this is to create video content personalized to their unique life circumstances, pain points, and buying journeys. By making your video about them and showing them you understand their expectations, you personalize the relationship and begin to build trust. Again, this is also a trend that is spreading beyond the confines of millennials:
Salesforce found that two-thirds of today’s customers expect their financial institution to understand their unique needs and expectations, with over half (52%) expecting offers to always be personalized.