Millennials and the Mortgage Process: Digital Natives Becoming Homebuyers

Millennials and the Mortgage Process | GoRion Blog

Millennials stand apart from previous generations due to their widespread exposure to technology. As this large demographic reaches peak homebuying age, mortgage lenders are under pressure to reboot the lending process to cater to their unique expectations.

By numbers alone, millennials represent a huge opportunity for the mortgage industry. At the same time, they present unique challenges for lenders that have yet to make significant investments in technology.

Millennials by the Numbers

Millennials – people born between 1980 and 2000 – represent a significant share of the U.S. population. Numbering approximately 86 million,[1] millennials have already surpassed baby boomers as the largest living American generation.[2] But unlike their predecessors, they face significant economic barriers that became magnified following the 2008 financial crisis.

According to various sources, including the World Economic Forum, millennials are the first generation in modern history to be worse off than their parents. In 2013, millennials earned 43% less than what Generation Xers made in 1995, when Gen X was at a similar point in its development.[3]

As the economic recovery broadens, the tide appears to be slowly turning in millennials’ favor. Rising incomes and more plentiful jobs have inspired more young people to settle down and buy homes. This is evidenced by the fact that, by 2015, 60% of first-time homebuyers were millennials.[4] What’s more, 91% of people in this demographic say they intend to buy a home one day.[5]

For mortgage lenders, millennials represent both the present and the future of their market. To effectively reach them, a full embrace of technology and high-quality customer service are needed.

Millennials and the Mortgage Process

As digital natives, millennials spend considerable time shopping online. It is therefore reasonable to expect that they will also conduct their mortgage shopping over the internet. Traditional lenders slow to embrace this reality have seen their share of the mortgage market shrink in the face of competition from non-bank lenders. Efforts to bring the mortgage process online should therefore be a top priority for lenders that have not already done so.

As data from the National of Realtors (NAR) show, streamlining the mortgage process for millennials begins long before the application process. Ninety-four percent of millennial buyers begin their home search online, so it’s important to understand what they’re looking for before the application process even begins.[6]

Against this backdrop, there are five key areas lenders should focus on when working with millennials.


It goes without saying that a strong online presence is needed to reach millennial buyers. Just as young buyers research the housing market before they decide to buy, they also explore different mortgage lenders. This partly explains the huge success of e-lenders like Quicken Loans, which have carved out a strong online presence.

Efficient Communications

From text to email, digital natives are constantly connected to multiple messaging platforms. It is no surprise that they look for the same efficiency when communicating with their mortgage provider. This means that the first point of contact likely won’t be for an in-person meeting, but to request for more information. From there, lenders should view their communication with millennials as a continuous dialogue rather than a one-time interaction.


Millennials are meticulous researchers. Offering relevant information about mortgage topics in a digital format is a sign that lenders are serious about educating borrowers. This includes defining industry jargon and showing borrowers what to expect during the application process.

Embracing Mobile

Smartphone penetration has dramatically changed the online experience. As the NAR reports, more than two-thirds of millennial and Gen X homebuyers have used a mobile device in their home search. Offering a unique and efficient mobile experience can be a great investment for lenders looking to tap into digitally savvy consumers.  

Designing Mortgage Programs

From record student debt to lower wages, millennials face unique challenges when qualifying for a home. These factors influence everything from the amount of credit they qualify for to the down payment they can afford. Lenders should reflect on these challenges when helping young buyers obtain financing.[7] Where possible, providing a fully online mortgage application, including electronic signing of documents, is considered ideal.

While millennials face unique challenges entering the real estate market, they are just as determined to become homeowners as previous generations. As more enter peak homebuying, lenders can expect more activity from this segment of the market.

[1] Accenture (2017). Millennials: Your Mortgage Lending Present and Future.

[2] Laura Shin (April 30, 2015). “How The Millennial Generation Could Affect The Economy Over The Next Five Years.” Forbes.

[3] Paul Laudicina (January 15, 2017). “Wages have fallen 43% for Millennials. No wonder they’ve lost all hope.” World Economic Forum.

[4] TransUnion (October 18, 2016). “17 Million First-Time Homebuyers May Enter Housing Market Within Next 6 Years.”

[5] Dan Walker (August 19, 2016). “What Millennials Want from the Mortgage Process.” United Guaranty.

[6] National Association of Realtors (September 17, 2015). “Home Buying Process Involves Greater Technology, Realtor Use.”

[7] Dan Walker (August 19, 2016). “What Millennials Want from the Mortgage Process.” United Guaranty.

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This article has been exclusively written for GoRion by...

Sam Bourgi

Sam Bourgi

Sam Bourgi has more than seven years of progressive experience in economic analysis, market research, public policy and the financial markets. He has a broad expertise in the financial markets, including commodities, real estate the foreign exchange. As a published author in both peer reviewed and industry research, Sam has covered topics ranging from mortgage-backed securities to consumer spending and labor. Sam's resume includes more than 40 government and industry publications, thousands of financial articles and hours of educational resources on personal finance and trading.

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