Millennials’ View Of Home Buying Examined

Millennials’ perceived value in buying a home dropped below 50 percent, down significantly from post-Brexit high, according to the latest ValueInsured quarterly Modern Homebuyer Survey:

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In the third quarter of 2018, 48 percent of all millennials believe buying a home in America today is a good investment; this is a record low, down from 54 percent in the second quarter. The previous high was 77 percent two years ago.

Fifty-eight percent of millennials now agree buying a home is the best financial decision they can make for themselves and their family, another survey low in ten quarters.

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Just over six in 10 millennials (61 percent) now believe buying a home is more beneficial than renting, again a survey low, down from a high of 83 percent two years ago.

While 76 percent of all homeowners believe now is a good time to sell a home, only 39 percent of millennials who want to become homeowners believe now is a good time to buy a home.

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The ValueInsured Housing Confidence Index for millennials registered a score of 56.9 on a hundred-point scale in Q3 2018. It is the lowest level recorded, down 1.7 points from Q2, and down 10.1 points from a year prior.

In addition to reporting a steady slide in their conviction for home buying, more millennials now associate owning with sacrifices:

Nearly one in four (23 percent) believe they need to delay having children in order to afford buying a home

Thirty-two percent do not believe they can afford a healthy and balanced diet while saving for a home at today’s high prices

Thirty-one percent seriously consider relocating to another city to afford buying

“Conventional wisdom assumed millennials were buying homes later because they chose to get married and have children later,” says Joe Melendez, CEO and founder of ValueInsured.  “New research now suggests homeownership may be the cause, not the effect, of delayed family formation. It is an alarming trend, and we see more acute evidence in expensive housing regions.”

Among millennials who are still interested and motived to become homeowners “in the near future,” their anticipation is often filled with anxiety. Among motivated first-time buyers, 49 percent are concerned rising mortgage rates could make homes currently within their budget become unaffordable later; 67 percent are concerned they will not save enough for a home they would actually like to live in; and 52 percent believe a home they buy now will likely drop in value within one year. Sixty-eight percent are concerned about another housing crisis; and 64 percent admit they will likely experience buyer’s remorse after reaching their homeownership goal.

Their trepidation could be explained by the high stakes these millennials plan to undertake. Eighty-five percent in the survey expect their home down payment to represent over half of their total personal assets.

“Most homebuyers experience a healthy amount of jitters before such a milestone purchase – that’s normal,” Melendez said. “But the new normal is highly anxious, inexperienced buyers bungee jumping in without knowing if their safety harnesses will work. That is an unhealthy, bordering on dysfunctional trend that our industry needs to mitigate to ensure we do not lose an entire generation of future homeowners.”

Millennial Home Purchases Continue To Rise

Mortgages to Millennial borrowers for new home purchases continued their ascent in June, accounting for 91 percent of closed loans, according to the latest Ellie Mae Millennial Tracker report. In May, 90 percent of closed mortgages to members of the generation were for new home purchases, up from April’s 89 percent, and January’s annual low of 81 percent. This is in correlation with the Census Bureau’s latest quarterly homeownership and vacancy report that shows homeownership across Millennials age 35 and younger increased slightly, representing 36.5 percent of all homeowners, compared to 35.3 percent in the first quarter of 2018.

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Conventional loans remained attractive among Millennials, representing 69 percent of all loans closed in June, a slight uptick from 68 percent in May. FHA loans represented 27 percent of all closed loans to this generation, down one percentage point from the month prior. This is significantly higher than the Ellie Mae June Origination Insight Report data which showed FHA loans represented 20 percent of closed loans in the month for borrowers of all ages.

Average Millennial borrower FICO scores across all loan types rose slightly in June to an average of 723, up from 721 which held steady March through May. For purchases, the average FICO score was 746 for a conventional loan, 681 for an FHA loan and 744 for a VA loan.

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“As it remains a competitive, purchase-centric market, we will continue to keep a close eye on the purchase trends amongst Millennials,” said Joe Tyrrell, Ellie Mae’s executive vice president of corporate strategy. “This new generation of homebuyers wants the capability of an on-demand mortgage, and we are working to provide borrowers a convenient and secure digital mortgage offering that makes the homebuying process a seamless experience.”

Across all loan types, it took Millennials an average of 42 days to close on their loans in June, a day longer than in March, April and May. Purchases took an average of 41 days and refinances took an average of 45 days.

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In June, the hottest housing markets for Millennials were primarily in the Midwest. The top markets by percentage of Millennial loans closed included Clarksburg, W.Va. (65 percent), Watertown, S.D. (65 percent), Boone, Iowa (64 percent), and Dickinson, N.D. (61 percent).

The Ellie Mae Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. It mines data from a robust sampling of approximately 80 percent of all closed mortgages dating back to 2014 that were initiated on Ellie Mae’s Encompass mortgage management solution.

Millennial Homebuyers Exercised Their Purchase Power

Millennial homebuyers across the country exercised their purchase power in April as competition for limited housing inventory continued. Eighty-nine percent (89 percent) of mortgage loans made to Millennial borrowers during the month were for new home purchases, up one percentage point from the month prior, and the highest percentage since May 2017, according to the latest Ellie Mae Millennial Tracker.

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Interest rates also continued to rise in April to 4.73 percent, on average, up from 4.63 percent the month prior. This is the highest interest rate recorded since Ellie Mae began tracking Millennial loan data in January 2014.

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As interest rates crept up, average loan amounts to Millennials fell. The average amount was $194,300 in February, $192,055 in March and $188,171 in April.

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“Most Millennials are buying a house because there are major changes happening in their lives such as starting a family, getting a new job, or because they’ve decided that they want to build equity and stop renting,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “We believe Millennial home purchases will continue to climb this summer and while interest rates may slightly impact the size of homes borrowers can get for their money, we don’t foresee it impacting their desire to buy.”

Overall, conventional loans represented 67 percent of all closed loans to Millennial borrowers, while FHA loans held steady at 29 percent from the previous month. VA purchase loans for Millennial borrowers represented 79 percent of all VA closed loans in April, steady from the month prior, and up from 66 percent in February.

The time it took for Millennial homebuyers to close a loan remained flat month-over-month. Purchase loans took an average of 39 days to close and refinance loans took an average of 44 days. FHA purchase loans took an average of 40 days to close, compared to 41 days in March. VA purchase loans averaged 49 days-to-close, compared to 45 days the month prior.

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at

Refinances Remain Ready Among Millennials

Refinances among Millennial borrowers regained their popularity in the fourth quarter of 2017, according to the latest Ellie Mae Millennial Tracker. December was the third straight month refinances accounted for 15 percent of all closed loans for Millennial borrowers – the highest percentage of refinances for this demographic since February 2017’s annual high of 17 percent. The percentage of closed purchase loans remained at 84 percent, decreasing from June 2017’s peak of 90 percent.

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Specifically, the percentage of Conventional refinances remained at 19 percent, holding steady since October, while FHA refinance loans stayed at six percent from the month prior. The percentage of Conventional purchase and FHA purchase loans also remained the same from November to December at 80 and 94 percent, respectively.

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“With seasonality and low inventory levels at the end of the year, Millennial borrowers continued to take advantage of refinance options during the fourth quarter,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. “Many may have been driven by a desire to take advantage of low interest rates given uncertainty about potential rate hikes in the new year.”

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Other statistics of note for Millennial borrowers in December included:

>>The average 30-year note increased slightly from 4.18 in November to 4.22 in December, still lower than 2017’s highest monthly average of 4.34 in April.

>>The average time to close all loans held at 44 days in December.

>>Average time to close a refinance held at 45 days, while the time to close a purchase also remained flat at 42 days, the same since June 2017.

>>Average FICO scores for all closed loans fell one point from the month prior to 722.

The top Metropolitan Statistical Areas (MSAs) for Millennials by percentage of mortgage loans closed in December included Casper, Wyo. (71 percent), Williston, N.D. (63 percent), as well as Victoria, Texas and Mount Pleasant, Mich. (both 61 percent).

The Ellie Mae Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. It mines data from a robust sampling of approximately 80 percent of all closed mortgages dating back to 2014 that were initiated on Ellie Mae’s Encompass mortgage management solution. Searches can be tailored by borrower geography, age, gender, marital status, FICO score and amortization type.

Higher Rates Did Not Deter Millennials

Summer temperatures and higher rates appeared to have little effect on the Millennial homebuying market, according to August data from the Ellie Mae Millennial Tracker. Conventional loans remained steady at 64 percent of all closed loans by this generation, while FHA mortgages stayed at 32 percent—a market share they have held since June. The average loan amount for loans closed by Millennial borrowers in August of 2017 was $185,919, a slight increase from August 2016’s average $184,113, despite the average 30-year note rate having increased to 4.211 percent from 3.706 percent last year.

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In August 2017, the average Millennial primary borrower was a 29.4-year-old who took out a Conventional loan of $185,919 to purchase a home with an average appraised value of $223,882. This average homebuyer had a FICO score of 724, which helped them get a 30-year note rate of 4.211 percent, and they closed on their home in 44 days. The majority (64 percent) of primary borrowers were male. Additionally, more than half (52 percent) of borrowers were married.

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On the West coast, the average Millennial borrower was slightly older, at 30.6 years old, taking out a loan of $314,579 on average. Average loan amounts were lower in the Midwest, with homebuyers of age 29.5 closing loans averaging $158,584 in Kansas, for example. In Hawaii, borrowers of 31.4 years took out loans averaging $396,766.

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Overall, Millennials were most likely to close loans for the purpose of purchasing a home (87 percent). Refinances accounted for 12 percent of loans closed by Millennials in August.

“Average loan amounts in August of this year were slightly higher than last year, despite higher interest rates,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “As tends to happen with tight inventories, this is a seller’s market, and many of today’s homebuyers may be faced with paying a premium for the same home they might have bought for less last year. For those who are committed to buying a home, though, slight increases in competition, costs or interest rates will likely not deter them.”

Other key findings from the August 2017 Ellie Mae Millennial Tracker include:

The top five markets where Millennial borrowers represented the highest percentage of homebuyers in August were Lima, Ohio, Batavia, N.Y., Dyersburg, Tenn., Roswell, N.M., and Kendallville, Ind.

Female homebuyers increased their purchase power, with closed loans in August averaging $189,574, up significantly year-over-year from $184,094. Males took a slightly smaller jump, averaging $196,246 in August 2017, versus $194,913 last year.

The metropolitan region with the largest percentage of female homebuyers (63 percent) was Mankato, Minn., with an average loan amount of $136,597 and average borrower FICO score of 723.

Males made up 60 percent of the Millennial market in Lima, Ohio, with loans averaging $86,845 and averaging borrower FICO scores coming in at 725.

The Ellie Mae Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. It mines data from a robust sampling of approximately 80 percent of all closed mortgages dating back to 2014 that were initiated on Ellie Mae’s Encompass all-in-one mortgage management solution.

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at

Let’s Stop Trying To “Figure Out” Millennials

Millennials, millennials, millennials. Within the past five years, the term has invaded our vernacular and been used to sweepingly define a segment of the population that is apparently begging to be figured out by marketing experts in virtually every industry. But this demographic isn’t some unsolvable, complex equation. Marketers must simply work to communicate and meet the needs of each subset.

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A 20-25 year old is going to have a much different set of expectations when it comes to speed and convenience; for the most part, a world without the internet access is not one with which they’re familiar and mobility is an expectation, not a preference. In contrast, the 33-37 year old segment was coming of age at a time when the evolution of consumer technologies started taking off. As they have progressed into adulthood and into their careers, digital and mobile tools have ignited an appreciation for an ever-increasing level of ease. And then in between these two groups, 26-32 year olds became familiar with the internet as adolescents and developed an expectation that information should be easily accessible. The common denominator is convenience and the path of least resistance. My question is: are lenders equipped to provide that path?

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The industry has made significant progress in creating a frictionless, digital mortgage process. The move toward automation of income, employment and asset verification has already reduced lenders’ reliance on W-2’s, pay stubs and any other documentation that traditionally slowed underwriting. Even the manual verification process has become much more streamlined, provided that the lender is working with a comprehensive and trusted partner. In addition, the introduction of trended credit data allows lenders to to discern who, among two borrowers with identical credit scores, poses a higher risk. This facilitates more accurate and intelligent lending decisions, improving the quality of portfolios and contributing to the continuous decline in delinquencies. The pieces are available for lenders to deliver the level of convenience that will satisfy millennial homebuyers. So what’s next?

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First, originators need to become adept at converting the data and analytics into actionable components of the digital mortgage workflow to truly support the end-to-end origination process. If the borrower can use the app to transfer documents and close the mortgage, but still needs to come to the branch in person to get approved for the loan, there’s a good chance that the process will end before it even begins. Alternatively, if the borrower can get approved for a loan digitally, but needs to complete the rest of the process manually, it’s going to create friction and result in losing the business. In other words, don’t try to fool anyone.

Once the operational pieces are in place, the next thing that a lender must do is create a marketing strategy that clearly communicates and educates consumers on the value of the digital mortgage process. Shout it from the rooftops! Diving deeper, lenders must know where the borrower is in his or her respective lifecycle. Someone just out of college will be focusing on starting a career and saving money (and potentially paying down student loans). It’s unlikely that a home purchase is in the immediate future, but it is certainly on the horizon, so it’s important to establish that relationship so you’ll be the lender of choice when the time comes. An individual that is several years removed from college may have saved diligently and based on other financial triggers (paying down various loans, expanding their lines of credit, etc.), they may be a great prospect for a lender to get the dialogue started. Finally, older millennials may already be homeowners, but could also be prime prospects for home equity lines of credit (HELOCs) for home improvements or additions. As rates continue increasing, HELOCs will become more popular products thanks to the low cost of equity extraction and the ability for the borrower to tap into the funds as needed, instead of all at once.

As you can see, there is plenty of information available to lenders that will reveal where a prospective borrower is in the journey to homeownership. Supplementing that, geographical data shows the areas where low- to moderate-priced housing is plentiful or where buying is a more economic decision than renting. And as rates continue increasing, time is of the essence; it’s important to maximize the largest opportunities in each market while they’re still there.

I’m not the only one who has witnessed the evolutionary trajectory of the mortgage industry and how it has coincided with the increasing demand for convenience. So let’s stop trying to figure out millennials. The frictionless mortgage process is a reality and the tools are already there to help lenders accurately identify and appropriately market to borrowers of all ages – it’s time for us to put all of the pieces together and grow the business.

About The Author

Seth Kronemeyer

Seth Kronemeyer is vice president and vertical-marketing leader at Equifax Mortgage Services. He is responsible for pricing, product management, product marketing, campaign management, and mergers and acquisitions. Kronemeyer brings more than 15 years of industry experience to his position at Equifax, including marketing, sales, business-development and e-commerce expertise. He can be reached

It’s Not One Or The Other

Fifty-seven percent of homeowners applied for and completed their latest mortgage completely in person, while more than one-quarter of homeowners (28 percent) applied for their most recent mortgage using a combination of online and in-person interaction, according to the 2017 Borrower Insights Survey of homeowners and renters conducted by mortgage automation provider Ellie Mae. Another 11 percent of homeowners applied for their latest mortgage completely online with no in-person interaction.

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When asked what factor would have improved the mortgage process, approximately 40 percent of homeowners indicated they would have liked a faster process with fewer delays. Twenty percent indicated that a shorter, easier to understand application would be preferable, while 11 percent asked for more communication with their lender throughout the process.

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Millennials were the most likely generation of homebuyers to begin their mortgage application online and finish it with an in-person interaction with their lender (30 percent). Gen X (28 percent) and Baby Boomer (20 percent) borrowers weren’t far behind in using this online and in-person approach.

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“There’s no question that technology is playing a larger role in the home buying experience,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. “As we expected, many homeowners are seeking a faster and more streamlined experience. And it’s not just a millennial phenomenon; it’s homebuyers of all ages and both genders.

“But what’s even more telling is that homeowners still want a personal interaction with their lender. They want someone who can answer important questions, and make them feel confident that everything will be handled correctly and on time. While 27 percent of millennials identified the speed of the process as the top area to improve their experience, surprisingly 23 percent cited more face-to-face interaction as the second-greatest opportunity for improvement. By leveraging technology, lenders can provide a more high tech experience to simplify and speed the overall process, while still having the high-touch interactions when and where homebuyers want,” Tyrrell said.

The Ellie Mae survey found that today’s homebuyers most value speed, security and simplicity when applying for a home loan – all of which are enabled by technology. Millennials and women were the most likely to cite security as the most important factor when they applied for a loan. Gen X and Baby Boomer buyers were more likely to value the speed of the process. All three generations equally valued simplicity.

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at

Breaking Through To Millennials


In today’s ultracompetitive mortgage market lenders of all sizes are realizing the need to connect with millennial borrowers. To do so, it is critical to understand who these potential borrowers are and the best ways to market to them.

I recently listened to a webinar that provided great insight into this topic. The title of the webinar was “Marketing to Millennials: Essential Strategies for B2B and B2C” Presented by: Trish Witkowski, Foldfactory with Steve Belmonte, of Accuzip.

Here are some of the key insights that they shared. They started with who are Millennials and how big of an opportunity this demographic represents?

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Who are the Millennials?

  • k.a. “Gen Y”
  • 1980-2000 15-35 years old
  • Gen Y= 87+million
  • Gen X=69 million
  • Baby Boomers 78 million

Gen Y will be the largest and most powerful group of consumers this nation has ever seen (Kenneth Gronbach, The Age Curve). Its members are already consuming at 500% of their parents’ level in adjusted dollars for age. (Kenneth Gronbach, The Age Curve)

Millennials are digital natives. They have grown up in digital environments. The rest of us are digital pioneers. Only 6% think online advertising is credible. (SocialChorus) 95% see friends as their most believable source of product information. (SocialChorus)

The topic of marketing to millennials is not a new one but everyone wants to talk about what the big guys are doing. The challenge when looking at the big guys is the resources that they have at their disposal and understanding how to apply that to your business. Look at Coca-Cola, their marketing budget is just under 3 Billion. Nike is at $2.4 billion in marketing spending.

The good news is that budget aside, the same principles that these companies use to market to Millennials can apply to your business.

Here are ten principles of Marketing to Millennials (M2M)

  1. Authenticity– Are you authentic? So you have to ask yourself…
    1. Are we who we say we are?
    2. Are we transparent?
    3. Do we accept responsibility?
    4. Do we share our passion?
    5. Are we consistent?
    6. Do we care?
  2. Accessibility– 70% of Twitter users surveyed expect a response from brands they reach out to on Twitter (Lithium Technologies) 53% want that response in under an hour. 72% want that response in under an hour when they have a complaint. In this study it talked about how a negative brand experience could quickly change into a positive one if the response came within under an hour. They want you to acknowledge them and let them know that you are working to address their problem or concern.
  3. The Human Touch– Brands are moving from intellectual connections to emotional connections. The ability to have a human touch is really important. It’s all about creating those brand connections that create brand loyalty. 95% of all decisions are based on emotion. Think about it, you buy from people you like, you buy products that you love. It s about creating the relationship.
  4. Consciousness– Over 85% of Millennials correlate their purchasing decisions to the responsible efforts a company is making. (SquareSpace) Is your company making responsible efforts?

An example of a company that is applying this principle is Life is Good. The last page of their catalog talks all about growing the good. Giving Back. Cause marketing. Cause marketing is when for-profit business partners with a non-profit organization for mutual benefit. Cause marketing tips: Be authentic, make a connection, work it into corporate culture and don’t just write a check.

  1. Personalization– Personalized marketing communications stand out. Advancements in print media have taken the cost and complexity out of versioning. This allows companies of all sizes to do amazing things that really stand out.
  2. Speed- Millennials have a great need for speed. So, as a company you need to think about: Load speed of your web pages, quick clicks, fast checkout process, and fast response. They don’t have a lot of patience waiting for things.
  3. Technology Integration– In general Millennials expect a technology-integrated brand experience. We now spend more than 8 hours a day consuming media. (ZenithOptiMedia, 2015) So much of that is digital- our phones, tablets, laptops, podcasts etc. So print and the tangible experience have the opportunity to have a huge impact. Print + technology (email, PURL’s QR codes etc.)
  4. Social Media -Millennials are very social. Social media tips: No blatant sales pitches, keep it short, use good social media manners, interact with them, create opportunities to share, have a sense of humor. 41% of Millennials said the main reason they abandon content is that it’s too long (NewsCred) You have to be thinking about getting to the point before they abandon the content.
  5. Rewards– Millennials love loyalty programs. 68% of 20-34 year olds said they would change where they shopped if it meant getting more program rewards. (Bond Brand Loyalty) One third of those surveyed reported buying something they didn’t need or want just to earn points or increase membership status. (Bond Brand Loyalty)
  6. Ease of Use– There should be no barriers to entry in the brand experience. Easy access to website, mobile friendly etc.

Reach Millennials on their mobile devices. Think about how to get them on their mobile devices. They are always on their mobile devices. Use print to enhance the digital experience.

B2B- 46% of potential buyers researching B2B products are Millennials today, up from 27% in 2012. (Google and Millward Brown Digital) By 2020, the U.S. workforce will be 50% Millennials. (Millennials as B2B Buyers) So the key is the principles are the same.

So where should B2B focus their efforts? Definitely in mobile. 42% of researchers use a mobile device during the B2B purchasing process. (Google and Millward Brown Digital) and that trend is only going to go up and up.

The “Mobile First” Strategy: Responsive web design, intuitive navigation, speed, ease of use, and integration of video. 70% of professionals researching B2B products and services now use video across the purchase path. (Google and Millward Brown Digital) Integrating video is a big part of the purchase process. Get your clients to take video of themselves using your product and post it to your website.

Millennials preferred attributes for doing business: ease of doing business, willingness to collaborate, and industry/marketplace expertise. (IBM Institute for Business Value) Millennials rely on analytics…and the opinions of others.

70% of B2B decision-makers today begin their research through a generic online search. (Google and Millward Brown Digital) Millennials are open minded. Whether they are spending their own money or someone else’s, Millennials expect the best value.   So what works? Stand out format, personalized content, targeted audience and it must be memorable.

The key to breaking through to Millennials is understanding who they are and how they prefer to be marketed to. What works? Creative and interactive format, integration of mobile technology, combination of print and digital, integration of video, and simplicity of concept.

This is the digital generation who demands personalization, ease of use, and the ability to interact with your brand where and when they want. The combination of digital and print will help you stand out to the Millennial crowd.

About The Author

Brandon Perry

Brandon Perry is President at The Turning Point. Brandon oversees all operational and administrative activities of TTP. Brandon brings over 16 years of experience in various financial services industries to TTP which enhances the Company’s ability to maintain it’s position as industry leader in providing customers with an advanced marketing solution.

Reaching Younger Borrowers


Confusing, stressful, expensive, and overwhelming—these are just a few words millennials are using to describe the impact of student loans.

Student loans are beginning to have a ripple effect for many young adults, changing their perspective of financial responsibility in the process. Financial aid packages and student loans that once seemed distant and remote are now creating larger, more concerning issues for the recent college graduate.

According to a survey by American Student Assistance (ASA), student loans have a direct impact on daily life for many recent grads. The ability to go out to sporting events with friends, have cable television, or go shopping is being hampered by student loans. While these issues are not trivial, the bigger picture is a bit more disconcerting.

Financial instability due to student loans affects the purchase of larger items such as houses or cars; yet, they also are starting to affect marriages, family planning, retirement savings, and other large investments.

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Most students do not think about how their student loans will affect them five to ten years down the line when they are first entering college. Since students are receiving these loans for the purpose of higher education, many believe that student loans will be simple to pay off once they have a steady, nine-to-five job.

Sadly, this is far from the truth. Student loans are expensive to begin with, but for many students, they are necessary to achieve a college degree in the first place. The problem becomes the skyrocketing interest rates. These interest rates accumulate over time, and become a daunting expense for college graduates.

In fact, these student loans directly impact family life. The cost of weddings and marital expenses only continues to increase, and men and women alike are delaying marriages due to student loans. Instead of spending money on a wedding or a down payment for a new house, couples are choosing to delay their marriages due to immense student debt. ASA reported that 29% of participants admitted that student debt was a direct factor in delaying their marriage.

Those that did marry admitted that student loans were an important factor in deciding when to start their family. A striking 43% of participants claimed that student loans and debt delayed their decision to start a family. While these statistics do not indicate that student debt has affected the majority of young graduates, they certainly display the growing concern for college students and recent graduates to understand financial responsibility.

While student loans and financial aid are not inherently harmful, they can definitely be troubling when mismanaged or misunderstood. When applying for loans, students do not take enough time to explore all their options and typically settle for high interest rates. However, these loans paired with growing interest rates will take longer to pay off and will prevent the purchase of other larger items such as a house or a car.

For these reasons, it is crucial to understand student loans before accepting anything and everything that is offered. Additionally, ASA encourages students to apply for grants and scholarships rather than strictly applying for loans or financial aid.

Since 1982, financial assistance packages have shifted from being predominantly grants and scholarships to financial aid. While this shift cannot be undone, it does not mean that students cannot search for outside scholarships and grants. With companies and websites such as Fastweb and Niche, there certainly is not a shortage of scholarships; students simply need to take advantage of this fact. Grants and scholarships do not need to be paid back, and they do not affect one’s credit score, so they are more beneficial in the long run.

Universities benefit from offering more scholarships over time because it affects their graduates’ decision to donate to the school after graduating. ASA noted that student debt affects young graduates’ willingness and ability to support and donate to their alma mater. In fact, ASA cited that 72% of recent graduates admitted that their student debt affected their willingness to donate, and 77% percent of participants claimed that student debt affected their ability to donate to their alma mater.

Starting salaries for college graduates average about $45,000 per year. With student loans, credit card bills, and the cost of living, the ability to save money seems extremely challenging. The inability to save money over an extended period of time, along with high interest rates and potentially low credit scores, makes obtaining a mortgage quite difficult.

Three out of four participants disclosed that they had concerns about the ability to purchase a home because of their student debt. A car and a home are traditional purchases that naturally come into the picture after graduation. However, many people delay these purchases because they either are unable to receive a loan in the first place or realize that they will not be able to afford monthly payments.

Monthly payments on a house or a car can seem daunting when coupled with other standard monthly payments, specifically student loans. Students pay upwards of $300 each month for student loans, leaving them little room to spend money on other larger purchases.

ASA reported that recent college graduates had a higher debt-to-income ratio, meaning that the average grad spends 43.56% of their income on student debt, credit card bills, and mortgages combined.

As a result, many grads do not even qualify for mortgages and have little to no money remaining for an auto payment. Yet, the problem remains because graduates consider these two things essential.

Recent college graduates continue to be severely impacted by the staggering cost of student debt. When these people apply for a loan for a car or a mortgage for a house, these issues become paramount.

Students and graduates alike must see the big picture and borrow less, while simultaneously borrowing more wisely to avoid the harrowing effects of student debt. Student loans have the power to delay marriages, family life, retirement, and the purchase of items such as cars and homes. The bottom line—don’t let student debt consume your life and delay any major events or purchases in your future.

About The Author

Megan Hammond

Megan Hammond is a marketing intern for Catholic Vantage Financial, a Michigan based Credit Union. Her blog, Check This Out (, explores the challenges Millenials face when it comes to finances. From discussing the merits of debit and credit cards to the impact of purchasing a coffee from Starbucks everyday, Check This Out covers it all. For more information on Catholic Vantage Financial visit