Millennials: Obstacles, Opinions & Opportunities

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1 Millennials: Obstacles, Opinions & Opportunities Presented by: Jack Long MGIC Sales Manager

2 Legal Disclaimer The information presented in this presentation is for general information only, and is based on guidelines and practices generally accepted within the mortgage finance industry and is not intended to be all-inclusive. MGIC makes no representations or warranties of any kind with respect to the accuracy, completeness or suitability for any purpose of the information contained in this presentation. MGIC expressly disclaims any and all warranties, express or implied, including without limitation warranties of merchantability and fitness for a particular purpose regarding these materials and this presentation. In no event will MGIC be liable for any direct, indirect, incidental, punitive or consequential damages of any kind with respect to the presentation or materials provided. All examples are hypothetical and are for illustrative purposes only. This presentation is not intended and should not be interpreted or relied upon as legal advice. We encourage you to seek advice from a qualified professional. MGIC.com/social

3 Where s the First-Time Homebuyer?

4 Factors that affect housing demand

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11 Census Bureau 2014 The Increasing Cost of Renting $750 $700 $650 $600 Median Asking Rent $550 $500 $450 $400 $350 $

12 Why is everyone always talking about Millennials? MGIC.com/social

13 5 million more members than Baby Boomers in 70s! MGIC.com/social

14 Largest demographic to ever enter the nation s housing market MGIC.com/social

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20 What s in a name? Generation Y or GenYers Millennials FOMO Generation Net Generation Echo Boomers Boomerang Generation Peter Pan Generation Percent of demographic married by age 28: Baby Boomers 42% GenXers 29% Millennials 21% MGIC.com/social

21 18% Of first-time home buyers are single females. Source: NAR Profile 2015 MGIC.com/social

22 36.4% Of single women age live at home with parents or other relative Source: Pew Research Nov MGIC.com/social

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24 Income is rising Unemployment Nov 2015 by age group = 5.3% = 8.9% U.S. total = 5% Source: Bureau of Labor Source: Fannie Mae National Housing Survey August 2015 MGIC.com/social

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26 More Millennials have an M.B.A. than have no higher education at all Source: PayScale.com MGIC.com/social

27 In % of women were enrolled in college. In 2015: 27% Source: Pew Research Nov MGIC.com/social

28 60% of collegeeducated Millennials report annual income of $50,000 or more MGIC.com/social

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31 Millennial Behavior MGIC.com/social

32 Non Mortgage Debt Total Debt Balance and its Composition Trillions of Dollars HE Revolving Auto Loan Credit Card Student Loan Other Source: FRBNY Consumer Credit Panel/Equifax MGIC.com/social

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34 If you don't read the newspaper, you're uninformed. If you read the newspaper, you're mis-informed. - Mark Twain MGIC.com/social

35 Distribution of Student Loans % Borrowers by Balance in $1 - $10,000 $10,001 - $25,000 $25,001 - $50,000 $50,001 - $100,000 Over $100,000 MGIC.com/social

36 Share borrowers age years old with new mortgage originations 18% 16% 14% no student debt with current student debt of 100K+ with student debt, current or delinquent with current student debt with 90+ delinquent student debt 12% 10% 8% 6% 4% 2% 0% 2005:Q4 2006:Q4 2007:Q4 2008:Q4 2009:Q4 2010:Q4 2011:Q4 2012:Q4 2013:Q4 Source: New York Fed Consumer Credit Panel / Equifax MGIC.com/social

37 Percent 36 Proportion with home-secured debt at age Have Student Loan ages MGIC.com/social

38 Percent 36 Proportion with home-secured debt at age Have Student Loan ages No Student Loan ages MGIC.com/social

39 Federal Student Debt Repayment Plans Standard Extended Graduated Income-Driven Consolidated 47% Of student loan borrowers appear to be in deferral or forbearance periods. Source: FRBNY MGIC.com/social

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41 Renters Views on Homeownership financial aspects 86% 80% 77% Homeownership provides protection against rent increases Source: Freddie Mac Homeownership is an investment opportunity that builds long-term wealth Homeownership provides stability and/or financial security MGIC.com/social

42 Median Net Worth $300,000 $250,000 $200,000 Renter vs. Owner $194,170 $277,590 $272,700 $150,000 $100,000 $50,000 $2,090 $36,450 $49,500 $83,760 $5,210 $5,600 $6,200 $6,100 $5,150 $0 Under Over 65 Source: Joint Center for Housing Studies of Harvard University 2013; Dollars; 2010 MGIC.com/social

43 Renters Views on Homeownership Non-financial aspects It is something to be proud of 91% It can be passed on to your children 90% It allows more flexibility to design it the way you want 89% It gives you more privacy 86% It gives you more independence and control 81% It provides a better home life for children 76% It is a sign of success 76% It makes you feel more like part of a community 74% It allows you to live in a better, safer neighborhood 60% Source: Freddie Mac MGIC.com/social

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45 Where s the First-Time Homebuyer?

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48 Millennials Are Heavily Influenced By Their Peers I usually make the right decisions when I have the information I need. 87% 85% People often come to me for advice 58% 70% When my friends agree with what I want to do, I feel more excited about doing it. 48% 70% I usually don t make a major decision until I have discussed it with a few people whom I trust. 52% 68%

49 Millennials Shop Collaboratively 32% rely on company websites and reports for input. 33% rely on Professional reviews. 38% rely on consumer online reviews and blogs 42% rely on coworkers or classmates 65% rely on friends and family members. Every category is consistently higher than nonmillennials.

50 Millennials prefer and are using technology to shop! Millennials are 262% more likely than the average shopper to be influenced by Smartphone apps, 247% more likely to be influenced by blogs or social networking sites, and 216% more likely to be influenced by in-store touch screen displays

51 58% of smart phone users don t go 1 hour without checking their phones! 68% of those MGIC.com/social

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57 Millennials are slightly more likely than older shoppers to write a product review or complaint But. Their reviews or complaints are going viral. Going out to potentially thousands rather than to just one person in the complaint department!

58 What s your Brand? Millennials are probably already talking about you! Sometimes good, sometimes bad Do you know what they are saying? Are you actively responding?

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63 Number of Facebook friends Facebook Friends Average number friends of users in the United States, by age group Source: Statista, as of February 2014 MGIC.com/social

64 Join the celebration & get tagged! MGIC.com/social

65 Facebook Fan Pages Share Industry Insights Support Business Partners Loan Officers Small Community Businesses

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69 Learn how you can avoid the Top Regrets of Homebuyers. Scan me

70 74% know and understand the financial process of buying a home 44% believe 20% down payment is required Source: Wells Fargo, Sep 15, 2014 MGIC.com/social

71 23% Saving for down payment most difficult task Source: NAR Profile of Buyers & Sellers 2014 MGIC.com/social

72 #1 Reason Renters Won t Buy 62% 58% 44% Age Age Age Source: Freddie Mac MGIC.com/social

73 56% Renters who prefer to own but are not currently pursuing it because it would be too difficult to get a mortgage Source: Pulte Group May 2014 MGIC.com/social

74 74% Who fear they wouldn t qualify admit they haven t taken the steps to see if they would Source: Pulte Group May 2014 MGIC.com/social

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78 The Wave of First-Time Homebuyers Most Millennials just entering first-home buying years Born in 1985 & will turn 31 in 2016 MGIC.com/social

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82 What do I know about Millennials? I learn something new every day! MGIC.com/social

83 @mgic mgic.com/mgicconnects MGICvideos MGIC.com/social

84 My electronic business card is available at: Thank You! MGIC.com/social