NEXTGEN HOMEBUYER REPORT
2022
By Kristin Messerli
Sponsored by National MI
*For informational purposes only
INTRODUCTION
We began research for the first annual NextGen Homebuyer Report in April of 2020 and have since launched 4 surveys, totaling over 4,000 respondents between the ages of 18-44, alongside countless interviews with NextGen homebuyers and experts. Unsurprisingly, a common theme through the past three years has been that of uncertainty and consumer distrust.
In 2022, we continued to focus on the attitudes and perspectives of NextGen homebuyers, further identifying themes of financial accessibility and consumer confidence. There were significant variances in psychometric and behavioral approaches to homebuying and financial wellness between Gen Z and Millennials, as well as barriers by gender, race and ethnicity, and occasionally by income level. When relevant, that data is shared in the report below.
My hope with this report is that it will fuel more conversations on how to increase equal access to financial resources and increase empathy in the homebuying experience. I look forward to hearing your thoughts on how we can utilize this information to improve our industry and communities.
Cheers,
Kristin Messerli
Author | Speaker | Consultant
ACKNOWLEDGEMENTS
Thank you to the many leaders and experts who have contributed their thoughts, research, and support throughout the year that has helped shape this research and my ongoing work. Most notably, I am grateful for the collaboration from National MI, who has sponsored this report and research for the third year and continues to support thought leadership to advance sustainable homeownership with young and diverse homebuyers.
I also want to thank Dave Savage, Chief Innovation Officer of Mortgage Coach and Sales Boomerang, for his ongoing support and collaboration to create innovative thought leadership in the mortgage and housing industry. In addition, the following people have provided advice or interviews that helped craft this year’s research, including: Joe Puthur, Scott Harris, Sue Woodard, Tony Thompson, Patty Arvielo, Kevin Peranio, Marc Hernandez, Susan Stewart, Marcia Davies, and countless others. Lastly, I am very grateful for the friends and nextgen homebuyers who have provided their feedback and interviews to help shape the questions and insights in this report.
The mortgage and housing community has been a huge support in the mission to expand sustainable homeownership and accessibility to young and diverse communities, and I appreciate all who contribute in this effort.
Kristin Messerli |
BACKGROUND & METHODOLOGY
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DEMOGRAPHICS
52% Female
48% Male
30% Gen Z (18-24)
35% Young Millennial (25-34)
35% Older Millennial (35-44)
GENDER
RACE AND ETHNICITY
AGE
INCOME
Other
Asian + AAPI
Black / African American
Latinx / Hispanic
White / Caucasian
42%
26%
15%
6%
12%
$150k+
$125k-149k
$100k-124k
$75k-99k
$50k-74k
$25k-49k
0% 5% 10% 15% 20% 25%
Kristin Messerli |
Released October 2021
Visit NextGenHomebuyer.com to view previous years’ reports and research on NextGen homeownership
or go to NationalMI.com/NextGen-Resources for additional content.
2021 REPORT
Kristin Messerli |
NEXTGEN ACCOUNT FOR 46% OF ALL HOMEBUYERS
Source: National Association of Realtors, 2022
NEXTGEN
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NextGen Homebuyer Report
2022 Top Insights
Education: Lack of financial knowledge was the third biggest challenge this year for NextGen respondents.
Support: Only 56% of NextGen consumers said they have the financial advice and support they need to achieve their financial goals.
Confidence: Over half of NextGen consumers said they were not confidence in the stability of the housing market.
Trust: One in three NextGen homebuyers said they did not trust their loan officer to help them make smart decisions about their mortgage.
Experience: NextGen homebuyers who met in person were 41% more likely to give a 5-star experience vs buyers who had only met over online video.
1
2
3
4
5
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3
Knowledge & Education
Support & Resources
1
TABLE OF CONTENTS
2
4
Trust & Confidence
Challenges
5
Experience
FINANCIAL CHALLENGES
SECTION 1
TOP FINANCIAL CHALLENGES IN 2022
High Cost of Living
Mental Health or Anxiety
Personal Financial Knowledge
Too Much Debt
Interest Rates
Job Stability
Healthcare Costs
Finding Trustworthy Advice
College Expenses
59%
33%
30%
29%
27%
25%
22%
20%
10%
“What have been the biggest challenges to your financial situation this year?”
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TOP FINANCIAL CHALLENGES BY INCOME
67%
High Cost of Living
Mental Health or Anxiety
Personal Finance Knowledge
Too Much Debt
Interest Rates
Job Stability
Healthcare Costs
None
49%
29%
37%
34%
28%
26%
31%
27%
25%
22%
27%
25%
21%
9%
4%
Upper Income
Low-to-Moderate Income
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TOP FINANCIAL CHALLENGES BY AGE
High Cost of Living
Mental Health or Anxiety
Personal Finance Knowledge
Too Much Debt
Gen Z (18-24)
Younger Millennials (25-34)
Older Millennials (35-44)
47%
64%
65%
32.5%
37%
30%
26%
32%
30%
19%
34%
32%
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TOP FINANCIAL CHALLENGES BY GENDER
Women respondents were 36% more likely to be challenged than men in mental health and anxiety and 21% more likely to be challenged with job stability.
JOB STABILITY
42%
58%
45%
55%
Men
MENTAL HEALTH & ANXIETY
Women
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TOP FINANCIAL CHALLENGES BY RACE & ETHNICITY
High Cost of Living
Mental Health or Anxiety
Personal Finance Knowledge
AAPI
Black
Latinx
45%
59%
66%
58%
74%
Other
White
30%
38%
37%
24%
40%
22%
25%
36%
29%
24%
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KNOWLEDGE & EDUCATION
SECTION 2
One in three (37%) of NextGen consumers said they did not feel confident in their knowledge of personal finance.
of borrowers said reviews are important when it comes to finding a loan officer.
Financial Education
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Education in 2022
2022 NextGe Homebuyer Report by Kristin Messerli
Google / Online Resources*
Family / Friends
Financial Advisor
Parents
Social Media
Bank or Credit Union
98%
46%
44%
41%
39%
40%
“When you want to learn more about personal finance, where do you go?”
*This statistic is taken from the 2021 NextGen Homebuyer Report and removed from the question in 2022 so as to solicit more interesting information beyond the assumptive Google response.
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Young & multicultural consumers least likely to turn to bank for advice
Gen Z
Millennials
49%
60%
Latinx
Black
28%
40%
White
46%
Asian
44%
White NextGen consumers were 60% more likely than Latinx consumers to turn to a bank or credit union for financial advice and 53% more likely to turn to a financial advisor.
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NextGen homebuyers and owners said they believed you need 20% down or weren’t sure.
Financial Education
77%
Last year, the 2021 NextGen Homebuyer Report identified common myths and challenges to purchasing a home. The most common ones reported include: �
“I need a 20% Down Payment to purchase a home.”
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One in five recent NextGen homebuyers (18%) said they did not feel confident they knew how to maintain and care for their home as a homeowner.
Financial Education
1 in 5
“I know how to maintain and care for my home as a homeowner.”
NextGen homebuyers express feeling uncertainty at every stage of the homebuying process from decision to buy through post-close.
In 2021, one in four NextGen homebuyers reported feeling a lack of confidence in any step of the home buying process.
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TOP NEXTGEN SOCIAL MEDIA PLATFORMS
IN 2022
YouTube
TikTok
Snapchat
BeReal
74%
73%
72%
54%
52%
44%
31%
29%
6%
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ADVICE & SUPPORT
SECTION 3
Only half (56%) of NextGen consumers* said they have the financial advice and support they need to achieve their financial goals.
*Those reporting greater access to support identified as upper income, white, older, and male.
of borrowers said reviews are important when it comes to finding a loan officer.
Financial Advice & Support
Kristin Messerli |
of borrowers said reviews are important when it comes to finding a loan officer.
Financial Advice & Support
While single women make up the second largest cohort of homebuyers today, there is still a significant divide across gender in NextGen finance. According to the 2020 NextGen Homebuyer Report, men were over three times more likely to be investing than women and reported less stress about their finances. Women also stated a fear of being taken advantage of and not having a financial advisor.
In the 2022 study, women reported less trust in housing or finance professionals, less access to financial advice and support than their male-identifying counterparts. Women of color had significantly more challenges with access to financial support and information.
“I have the professional financial advice and support I need to achieve my financial goals.”
Men
Women
65%
47%
WOMEN’S
NextGen women were 37% less likely to report access to financial advice and support than men.
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Financial Advice & Support
by Race & Income
Upper Income
Low-to-Moderate Income
65%
50%
Latinx
Black
48%
57%
White
65%
Asian
44%
White and Upper Income NextGen consumers were significantly more likely to report having access to the financial advice or support they need to achieve their financial goals.
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TRUST & CONFIDENCE
SECTION 4
TRUST IN 2022
“I trust my professional to help me make smart decisions.”
Loan Officer
Real Estate Agent
Bank or Credit Union
70% of NextGen homeowners said they trusted their loan officer to help them make smart decisions about their mortgage
77% of NextGen homeowners said they trusted their real estate agent to help them make smart decisions about their home
64% of NextGen consumers said they trusted their bank to help them make smart decisions about their finances
Trust has continued to decay across all market segments and industries. For the first time in history, the U.S. Trust Index dropped below 50%, making it the default emotion according to the 2022 Edelman Trust Barometer, dropping 10% since just 2017.�
In the 2021 Report, two in three NextGen homebuyers reported they did not think their lender was trustworthy or reliable. This year, we identified trust increases when asked about the individual but remains lower at the institutional level.
Kristin Messerli |
TRUST BY AGE
Older Millennials (35-44)
Younger Millennials (25-34)
Gen Z (18-24)
“I trust my professional to help me make smart decisions.”
58%
77%
+19
67%
86%
+19
66%
67%
+1
Loan Officer
Real Estate Agent
Bank or Credit Union
77%
In comparison with Millennials, Gen Z were less trusting across real estate and lending.
Age did not have any significance on trust in banks or credit unions.
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TRUST BY GENDER
Women
Men are more than two times more likely than women to say they trust their loan officer.�
“I trust my professional to help me make smart decisions.”
62%
79%
+17
80%
+5
61%
68%
+7
Loan Officer
Real Estate Agent
Bank or Credit Union
75%
Men
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TRUST BY RACE
“I trust my professional to help me make smart decisions.”
53%
83%
+19
67%
86%
+19
66%
67%
+1
Loan Officer
Real Estate Agent
Bank or Credit Union
77%
Latinx NextGen respondents were 56% less likely to trust their loan officer than White respondents. �
Black and African American respondents were significantly more likely to trust their bank or credit union in comparison with a housing professional.�
White NextGen homeowners were 22% more trusting of their loan officer than homeowners of color.
71%
White
Black
Latinx
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The majority of NextGen Homeowners (61%) reported a lack of confidence in the stability of the housing market over the next 5 years, but were confident their home would ultimately be a good investment (82%).
of borrowers said reviews are important when it comes to finding a loan officer.
Confidence in Housing
Kristin Messerli |
NextGen Homeowners said
they were confident their home would be a good investment (82%)
of borrowers said reviews are important when it comes to finding a loan officer.
4 in 5
*Consistent with 2021 findings, in which 22% of NextGen homebuyers reported concern their home would not be a good investment.
Confidence in Housing
“I am confident my home will be a good investment.”
Kristin Messerli |
NextGen homeowners said they lacked confidence in the stability of the housing market over the next five years.
of borrowers said reviews are important when it comes to finding a loan officer.
Confidence in Housing
61%
Men were 19% more likely to report confidence in the housing market compared with women (43% vs 36%).�
Latinx were most confident in the stability of the housing market, reporting 15% higher confidence than other racial or ethnic segments. �
Upper income were 75% more likely to report confidence than low-to-moderate income (53% vs 30%).
“The housing market will remain stable over the next five years.”
Kristin Messerli |
EXPERIENCE
SECTION 5
Only half (58%) of recent* NextGen homebuyers rated their overall experience as five stars.
of borrowers said reviews are important when it comes to finding a loan officer.
Homebuying Experience
*Homebuyers who purchased a home within the past 18 months.
Kristin Messerli |
Gen Z and Women rated lower satisfaction with homebuying experience
Gen Z
Millennials
49%
64%
Men
67%
Women
50%
Asian
44%
NextGen men and Millennials were 32% more likely to report a five-star experience than women and Millennials.
Kristin Messerli |
NextGen homebuyers who met in person were 41% more likely to give a 5-star experience vs. buyers who had only met over online video, and they were significantly more likely to trust their loan officer.
of borrowers said reviews are important when it comes to finding a loan officer.
Experience Matters
Kristin Messerli |
ABOUT KRISTIN MESSERLI
Kristin Messerli is a leading strategist and keynote speaker on NextGen homeownership and empathetic leadership. Kristin has worked with hundreds of lenders and financial institutions and spoken to thousands of real estate professionals on the topic of building trust with today’s consumers.
Kristin founded and sold the digital marketing agency, Cultural Outreach, with the mission to promote homeownership in young and diverse markets. She was previously the VP of Sales and Strategy at Experience.com, and has consulted with numerous fintech startups across product design, marketing, and research. Kristin is a frequent speaker at conferences, including the Mortgage Bankers Association, Digital Mortgage, and Harvard Business School. Kristin produced and authored the 2020-2022 NextGen Homebuyer Reports, highlighting key insights from over 4,000 NextGen homebuyers.
For speaking or consulting inquiries, Kristin can be contacted at kristin@kristinmesserli.com, or visit her website at kristinmesserli.com.
Kristin Messerli |
ABOUT NATIONAL MI
National Mortgage Insurance Corporation (National MI) is a U.S.-based, private mortgage insurance company established with a mission to enable low down payment borrowers to realize homeownership, while protecting lenders and investors against losses related to a borrower’s default. We take a straightforward approach to both our products and practices to ensure lenders’ confidence in the loans they place with us. We adhere to high standards in insurance underwriting and processing, and customer service. National MI is committed to delivering mortgage insurance solutions that provide a path to coverage certainty. For more information on National MI, visit nationalmi.com.
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DISCLAIMER
The information contained in this Report has been provided by Kristin Messerli for general information purposes only and does not replace independent professional judgment. While every care has been taken to ensure that the content is useful and accurate, Kristin Messerli gives no guarantees, undertakings, or warranties in this regard, and does not accept any legal liability or responsibility for the content or the accuracy of the information so provided, or for any loss or damage caused arising directly or indirectly in connection with reliance on the use of such information. Any errors or omissions brought to the attention of Kristin Messerli will be corrected as soon as possible. The Report cannot be
edited without prior approval.
Kristin Messerli |
NextGenHomebuyer.com
Visit NextGenHomebuyer.com to view past reports and research or go to NationalMI.com/NextGen-Resources
KRISTIN MESSERLI�Speaker | Author | Consultant
kristin@kristinmesserli.com
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