Vision 2014: Mortgage and Millennials
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© 2014 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc.
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Mortgage and Millennials and how to target them
Marnie Applegate PNC
Michelle McLellan Bank of America
#vision2014
Rita Carroll Experian
Crissy Wallace Experian
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The Millennials Why they matter and the impact they have on the mortgage market
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Generational review
Greatest /
Silent
1927 – 1945
Age: 69-87
Baby
Boomers
1946 – 1964
Age: 50-68
Gen X /
Busters
1965 – 1983
Age: 31-49
Gen Y /
Millennial
1984 – 2002
Age: 12-30
Gen Z /
Digital
>2003
Age: <12
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Millennials demographics Education
X
8%
23%
38%
20%
12%
0%
8%
23%
50%
12% 6%
1%
Less ThanHigh School
Diploma
High SchoolDiploma
SomeCollege
BachelorDegree
GraduateDegree
Unknown
Gen X Gen Y
Education level
Y
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X Household income
Y
Millennials demographics Income
27%
43%
29%
46%
39%
16%
<$50,000 $50,000-$99,999 $100,000+
Gen X Gen Y
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12% Families in Motion
14% Promising Families
27% Singles and Starters
Experian Millennials Mosaic® segments
Digital Dependents Singles who live
digital-driven, urban
lifestyles 7% Pastoral Pride
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Millennials identification
The Millennials: Confident.
Connected.
Open to Change.
Generations, like people, have
personalities, and Millennials
– the American teens and
twenty-somethings currently
making the passage into
adulthood – have begun to
forge theirs: confident, self-
expressive, liberal, upbeat and
receptive to new ideas and
ways of living.
— pewsocialtrends.org
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Millennials and mortgage
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Unemployment impacts Riding through the various economic cycles
4.6 4.0
5.2
8.8
11.3 11.5
10.7
9.4
7.9
0
2
4
6
8
10
12
14
2005:Pre-Recession
2006:Inception
2007 2008 2009:Height
2010 2011:Pre-Recovery
2012 2013::Recovery
Pre-Recession: Young Millennials: 3-5 yrs. old & Oldest Millennials: 21-23 yrs. old During Recession: Young Millennials: 5-9 yrs. old & Oldest Millennials: 23-27 yrs. old
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Unemployment rate for key MSAs
0
2
4
6
8
10
12
14
2005 2006 2007 2008 2009 2010 2011 2012 2013
An
nu
al
un
em
plo
ym
en
t ra
te
Los Angeles
Chicago
Miami
Dallas
Austin
Percent Change
2005-2013
Los Angeles Chicago Miami Dallas Austin
72% 60% 71% 15% 10%
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Millennials age breakout
Millennials
2006-2013
Generation X
2006-2013
19-22 years old
<19 years old
23+ years old
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Examining the period of impact
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
After
Jan 2013
Pre-recession Bubble Recovery Height Pre-recovery
Timeframe reviewed: 2005-2013
Pre-Recession
Recovery
Prior to
Jan 2006
Jan 2006 –
Dec 2008
Jan 2009 –
Dec 2010
Jan 2011 –
Dec 2012
During Recession
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Key MSAs
Millennial concentration Where are they?
Age breakout
18*–24
35% 25–30
65%
* Only >= 18 due to
credit profile High Low
0.77% 0.25%
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Millennials credit health
Mortgage debt
Debt to income
Mortgage
performance
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Indebtedness comparison nationwide Average current debt balances by generation
As of Dec 2013
+27%
+19%
+58%
$2,179 $1,899
$6,352 $2,669
$18,063 $14,663
$32,351
$23,563
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
Generation X Millennials
Retail Bankcard Auto Student Loan
13%
58%
19%
27%
$210,107
$151,758
$-
$50,000
$100,000
$150,000
$200,000
Gen X Millennials
Mortgage Only 28%
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Indebtedness comparison nationwide (non-mortgage)
Average balances by recessionary period
$-
$10,000
$20,000
$30,000
Retail Bankcard Auto Student Loan
Generation X
PreRecession Bubble Height PreRecovery Recovery
84%+ 27%+ 71%+ 13%+
$-
$10,000
$20,000
$30,000
Retail Bankcard Auto Student Loan
Millennials
136%
+
59%+ 24%+ 211%
+
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Indebtedness comparison – mortgage only Average balance by recessionary period
$169,022
$204,984 $210,107
$145,982 $142,868
$151,758
$100,000
$150,000
$200,000
PreRecession Recession Recovery
Gen X Mortgage Millennials Mortgage
30% 28%
14%
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Experian ability to pay models
Models developed with verified income data that included wages, investments, alimony, rents, etc.
Income InsightSM outputs dollar amount of total income rounded to nearest thousand ranging from $15,000 to $990,000
Income Insight W2SM outputs dollar amount of wage income rounded to nearest thousand ranging from $1,000 to $990,000
Income InsightSM
Offered as an add-on to Income InsightSM
Debt-to-Income InsightSM provides total debt
Debt-to-Income Insight W2SM provides individual debt
Premier AttributesSM available for calculation – total monthly payment:
► All debt
► First mortgage debt
► All mortgage debt
This specific research:
Monthly payment DTIs
Debt-to-Income InsightSM
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Income Insight W2SM score Average Income by generation
$40
$30
$45 $46 $47
$23 $19
$26 $28
$30
$-
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
PreRecession Bubble Height PreRecovery Recovery
An
nu
al
Inc
om
e (
Th
ou
sa
nd
s)
Generation X
Millennial
43%
36%
AVG
AGE
31 33 35 37 39
17 19 21 23 25
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Debt-to-income comparison Average monthly payment to income ratios
10 10 8 8 8
10 11 9 9 9
30 31 28
26 25
35
39
35
32 31
0
20
40
60
PreRecession Bubble Height PreRecovery Recovery
DT
I S
co
re –
Mo
nth
ly p
aym
en
t / in
co
me
Gen X DTI (less mortgage)
Millennials DTI (less mortgage)
Gen X DTI
Millennials DTI
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Predicts risk of borrower
► Likelihood of future serious delinquencies (90 days late or greater)
► Any type of account
24-month performance
Score range of 300-850
► Higher scores represent a lower likelihood of risk
► Lower scores are higher risk
VantageScore® 3.0 Model overview
A = Super-prime 781-850
B = Prime 661-780
C =Near Prime 601-660
D = Sub-prime 500-600
F = Deep Sub-prime 300-499
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Average VantageScore® 3.0 comparison Generation X vs. Millennial
634 634 636 640 643
619 611 612 614 617
400
500
600
700
PreRecession Bubble Height PreRecovery Recovery
Va
nta
ge
Sc
ore
® 3
.0
Recessionary timeframe
Generation X Millennial
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Average VantageScore® MSA comparison Each by recessionary period
606 617 627 629 635
600 603 618 623 628
608 607 622 628 633
500
600
700
800
Dallas Miami Austin Los Angeles Chicago
Millennials
Scores also on the uptick, recovering little slower
618 630 638 644 650 627 624
647 642 652 637 630
657 650 659
500
600
700
800
Dallas Miami Austin Los Angeles Chicago
Generation X
PreRecession Recession Recovery
Scores on the uptick
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27%
31% 31%
2%
4%
7%
0%
10%
20%
30%
PreRecession Recession Recovery
Average percent of consumers with mortgage trade on file
Generation X Millennials
Mortgages comparison nationwide By recessionary timeframe
Up 126%
Up 67%
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Mortgages comparison by MSA Average percent of consumer with first mortgage trades
21% 21%
31% 35% 34%
0%
10%
20%
30%
40%
Los Angeles Miami Dallas Austin Chicago
Generation X
PreRecession Height Recovery
3% 3%
6% 7% 6%
0%
10%
Los Angeles Miami Dallas Austin Chicago
Millennials
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Credit performance – ever 60DPD By recessionary period
12%
22%
26%
15%
17%
13%
0%
25%
PreRecession Recession Recovery
Number of consumers with first mortgage trade 60DPD
Generation X Millennial
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Millennials current view
Average mortgage debt: $151K
Average DTI:
9% monthly,
31% including mortgage
Average mortgage performance:
13% 60DPD in 24 months
Data as of Dec 2013
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Millennial targeting
Marnie Applegate
PNC
Michelle McLellan
Bank of America
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How to attract the RIGHT Millennial population
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