By Mark Greco
Millennials are digital natives. They grew up around technology and understand how to leverage its capabilities to their advantage. As a result, the widespread assumption is millennials prefer to conduct their transactions online rather than make a trip to a brick-and-mortar service provider or retailer. And while that may typically be the case, data reveals that when it comes to online mortgages, Generation X – the population that entered adulthood without personal computers or the Internet – actually outpaces millennials in terms of technology adoption.
Online Mortgage Tech Most Popular Among Gen X
Gen Xers (people between the ages 35 and 54 in 2018) make up a majority 52 percent of applicants on the 360 Mortgage Group NOLO online mortgage platform. By comparison, millennials (people 20 to 34 years old) make up just 26 percent of applicants — so, half as many millennials are applying for online mortgages as Gen Xers. At first glance, this revelation is surprising. After all, it appears to debunk the myth that millennials are always the first to adopt new technology. But, with a little further analysis, the data makes total sense.
Gen Xers buying homes are likely to be more familiar with home mortgage loans. Members of this generation have had time to purchase a first home and are possibly buying a second or third. Gen Xers who have experience with home ownership will also have had experience with the traditional home loan application process — which equates to a weeks-long wait and a mountain of paperwork. Ellie Mae, the origination platform for 25 percent of the industry, reports that it takes an average of 43 days to close on traditional home purchase loans.
The high percentage of Gen Xers that make up the online mortgage application pool is likely representative of a group of experienced home buyers hoping to leverage technology to bypass the headaches involved with the traditional application process — and to complete the whole process online in days (rather than weeks).
Millennials Are Buying Their First Homes, and They Want Help
On the other side of the coin, millennials interested in home ownership in 2018 are typically buying their first (and not second or third) home. And because home purchases are such a major financial undertaking, the stakes are high. For this reason, many millennials who are first-time home buyers may assume that they stand to benefit from an in-person, traditional application process.
The flaw in that logic is that most online mortgage application platforms include chat or in-person consultant capabilities. As people complete the online application process, they can reach out in case of questions or concerns at any time and receive comprehensive support for their issue. In other words, it appears numerous millennial homebuyers are jumping through unnecessary hoops to secure a benefit that they would still receive if they went through the faster online mortgage process.
Online Mortgages Are Increasing in Popularity, and Millennials Won’t Miss the Boat
While that is unfortunate, the good news is that it’s likely temporary. After all, millennials are renowned for their research skills. As online mortgages become more mainstream, the tech-savvy generation will develop a better understanding of the online mortgage application process — and soon catch up to their older siblings in Gen X.
By Mark Greco
360 Mortgage Group, LLC
NMLS ID # 155922