The average age of today’s first-time home buyer is 30 years-old, which means they fall under the infamous millennial age bracket. The mortgage lending industry has already begun to feel the pressures of a generation with expectations of efficiency: bigger, better, faster. Just last year, millennials made up the largest share of home buyers at 34 percent (68 percent of new home buyers) and with their business came increasing needs for more digital, and in many cases more automated, solutions.
While some have hypothesized that pivoting towards technology leads to a bleak future for the industry, others see catering to millennials in this way as an opportunity for development. Despite incremental improvement, the housing market is still recovering from its 2008 collapse, and with millennials occupying one quarter of the United States population, they offer the mortgage industry an economic boom unlike any since the Baby Boomers.
However, millennials are riddled with more student loan debt than their predecessors. While this has historically kept millennials from obtaining home loans, Fannie Mae revealed solutions this past April to help millennials afford homes despite their debt. Now, 90 percent of millennials plan on owning a home in the future – that’s more than 68.6 million mortgage appraisals. Furthermore, 49 percent plan for their next move to be into a home.
Keeping the impending appraiser shortage in mind, these numbers present a challenge. Which is why it's been discussed that billions of dollars of these deals are expected to be completed with some combination of technological means. While appraisals still require experienced professionals to complete the work, the majority of lender, borrower, and appraiser communication will more than likely shift further toward a screen.
Millennials are accustomed to having everything they need at the touch of a button. This means an inevitable influx in smartphone applications, online e-signatures, and streamlined processes. When broken down, however, their demands mirror the appraisal industry’s most common guarantees: speed and accuracy. They want it fast, and they want it done right.
And why not? Though traditional professionals may experience a learning curve, digital communication simplifies the process not only for millennials, but for lenders and appraisers as well. It provides a fast way to relay well documented information, and forward-thinking lenders should ensure their Appraisal Management Companies (AMCs) are ready to meet the digital needs of the future housing market’s most profitable demographic.