Jay Garvens: Taking An Origination Approach To Demographics

PERSON OF THE WEEK: Jay Garvens is a branch manager with Churchill Mortgage in the company’s Colorado Springs, Colo., location. MortgageOrb recently interviewed Garvens to get his take on the changing makeup of today’s home buyer demographic and how this will ultimately shake out in terms of mortgage originations.

Q: What is so significant about the makeup of today’s home buyer demographic?

Garvens: We currently have a generational economy that is composed of two large groups, the millennials (15 to 35 years old) and the baby boomers (55 to 70 years old), with gen-Xers (35 to 54 years old) in between. The economy is driven by people between the ages of 40 and 60, primarily because this group is in its prime earning years and spends more money on children, automobiles, business travel, investments, retirement plans and up-sizing their homes.

From the mid-1980s to the mid-2000s, we had an explosive economy, and it is no coincidence that this was the same time period during which the baby boomers were between 40 and 60 years old. The growth was fueled by the generational consumption of 78 million people that were coming of age. As this group has entered retirement age, its spending has slowed and the buying power has shifted to gen-X, which has 30 million fewer people. Much of the slow economy can be attributed to the fact that the generation with the most buying power today is also the smallest group within the population.

Q: How has this impacted home buying in America today?

Garvens: Right now, the rental market is booming, which isn’t coincidental. The millennials are graduating from college, eliminating debt and moving out of their parents’ basements, but a slower economy has delayed the first-time home buyer’s entry to the market. And like the baby boomers, millennials significantly outnumber gen-Xers. The result is that the rental market is booming like never before because the largest generation has not started to maximize its purchase potential. Eventually, millennials will be the majority homeowner population, but right now, they’re approximately one-third of the total.

Q: What does this mean for the strategies being deployed by today’s mortgage industry professionals?

Garvens: Generational consumption affects origination in multiple ways, so originators need to know how to capitalize on demographics. Millennials will soon become a larger part of the origination market – so marketing techniques need to be developed to attract this generation. The majority of millennials aren’t purchasing yet, but the ones that are in the market are making their decisions online and through video, not through telephone, radio or face-to-face communication. The Internet is really where a millennial is going to make his or her decision, so you have to focus your efforts on helping him or her get into the market for the first time. And regardless of what you’re running – a brokerage, branch or even an individual book of business – if you’re not incorporating a digital marketing strategy to accommodate these preferences, then you’re going to see a decline in your business and miss out on an entire generation of opportunity.

Q: That takes care of millennials – what about gen-Xers and baby boomers?

Garvens: A majority of refinances are coming from the baby boomers, who are consolidating the last of their debt and refinancing mortgages so that they’re fixed for the foreseeable future. This group is likely best served with consultative services centered on refinancing or downsizing. And the gen-Xers are doing the move-up and consolidating, so your primary purchase demographics will be this group of people because they have the resources to move on to their second homes.

Q: Should we expect any of these strategies to change in 2017?

Garvens: No – primarily because these strategies share a common foundation of meeting the needs of borrowers at the individual level. The need will change over time, but the ability to provide quality service will always be sourced from a lender’s ability to consult with borrowers and identify what product is the most appropriate one for their needs.

At Churchill Mortgage, we refer to this as having the “heart of a teacher,” and it encompasses more than originating loans. It involves viewing each loan as a family, not a file, and helping the borrower achieve debt-free homeownership through a transparent and authentic process. Regardless of which company you work for, this is how trust is built and maintained over time, and it’s one of the primary drivers of your referral business. I’m reminded of a quote from Zig Ziglar, who said, “You can have everything in life you want if you will just help other people get what they want.” Similarly, the most successful lenders are those that are most effective at helping borrowers succeed.


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