Understanding the Unique Needs of Today’s Home Buyers: Part One

March 2025

As mortgage providers, we have the opportunity to work with customers spanning every generation from Baby Boomers through Gen Z. Each age group has a set of specific requirements, values, and resources available to them. Although data can’t reflect all borrowers from the different generations, it’s important to understand the general trends of their unique needs and help them determine what’s possible as potential homeowners. At MAM, we track the trends to help you understand your clients better.

How Rates are Impacting Home Buying

Recent statistics show that Boomers are hesitant to move out of their family homes and downsize due to current mortgage rates, which makes it difficult for Millennials to leave rentals or starter homes and purchase larger family homes. When Boomers do move, many of them are avoiding mortgage rates by paying in cash. For Boomers unsure of their next steps, credit unions can offer helpful information on refinancing, consolidation, or strategies for managing debt to find the right solution for their situation.

This trend also impacts Gen Z as they begin exploring the idea of home ownership and looking for the more affordable housing that Millennials still occupy. There’s a shortage of housing inventory for new buyers resulting in increased prices alongside high mortgage rates.

We know mortgage rates are higher than a few years ago and the share of first-time home buyers is at an all-time low at only 24% of buyers. However, we’re seeing some encouraging trends. This is why understanding a potential buyer’s background, values, and needs really matters as we tailor our services to their specific requirements.

Today's Home Buyers

Millenials make up 38% of current buyers, with the average median age of a first time home buyer in the U. S. being 38 years old. This group is able to afford a larger mortgage due to their age and financial stability. They are older, more mature and better understand the investment of home ownership. They know a lot, so when working with this group it’s important to affirm their understanding and offer them expertise where there may be lingering knowledge gaps.

On the other hand, younger buyers are still out there and looking for lower cost homes. They have to sacrifice more than older buyers to reach their financial and home ownership goals, so they’re willing to explore different options, down payments, and products. They’re educating themselves and looking for the smartest ways to buy a home. We can provide our expertise on various options and help young buyers see how their sacrifice and investment now will pay off in the long term.

It’s important to convey to possible buyers that anyone thinking about buying a home needs to be prepared and ready to act if and when rates drop closer to that “magic” 6%. Credit unions are uniquely positioned to help members become homeowners in this market, and MAM offers a wide range of resources that can make a difference.

Looking Forward

Home buyers are beginning to acclimate to today’s rates as they realize these are likely to change incrementally, not in dramatic dips. If they wait for a significant change in rates before purchasing a home, they may have to put their lives on hold while their housing needs continue to either decrease or grow. Opportunity still exists for each age group regardless of interest rates–people still need homes.

We can also anticipate that Boomers will begin to downsize as they age and their housing needs continue to decrease. When inventory increases, homes will become more affordable for the next generation of home buyers.

In addition to more inventory, real estate experts project that budget-friendly areas like the Midwest will continue to be in demand for new buyers, especially Gen Z. They account for a national average of 3% of overall home buyers, but in the Midwest the number of home purchase applications by Gen Z buyers has risen to 13% and is projected to grow.

As more homes become available and demand remains steady in affordable areas, the services credit unions offer through MAM become even more important. Together we educate new home buyers, especially younger buyers, on the smartest options for buying a home within their budget. See our latest tips for marketing to Gen Z to learn more about their needs in the current housing market. Working with older, motivated Millennials? Check out our article 3 Ways to Understand Motivated Buyers to learn more. Stay tuned for Part Two on the unique needs of today’s home buyers in our next newsletter.

Member Advantage Mortgage helps make credit unions the hero of their members’ homeownership journey, regardless of their size. We think the best place to start is by listening. Let’s start with a confidential conversation; just reach out to me and we’ll be in touch shortly.

Jim Mitchell
(616) 466-7793
[email protected]

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