While the baby boomer and millennial generations have been an endless source of media fascination from past to present, there is an important “middle child”, so to speak, generation sandwiched in there, and its name is Generation X. Gen Xers are unique, and so are their buying habits. Specifically, we'll talk about Gen X home buying attitudes and what they mean for financial services marketers.
Although Gen X is often referred to as the neglected, forgotten generation, marketers should not miss out on targeting this segment, particularly in the home financing realm.
Who is Generation X, exactly?
- Gen Xers were born roughly between 1965 and 1980
- They’re a smaller generation in comparison – only 66 million vs. 75 million boomers
- Only 41% of Gen Xers identify with their generation
- 40% have children under 18, and a quarter of them have parents who live with them
To properly target Gen X in the home buying market, we first need to understand their disposition. Gen X is more pessimistic (than boomers and millennials) about achieving comfortable retirement. Only 1 in 5 are confident about retirement compared to 1 in 3 boomers and about half of millennials. Lastly, 48% of Gen Xers expect to provide care for aging parents.
It is no wonder they have low hopes, as statistics show they are the most disadvantaged generation in the world of real estate. This is at least in part due to the 2008 housing market crash that left many Gen Xers with underwater mortgages and foreclosed homes. At the time of the crash, most Gen Xers were new homeowners without years of value appreciation to cushion the blow.
But despite all this, Gen X is making a surprisingly steady recovery.
The Gen X Segment is Powerful!
A steady recovery indeed. Gen Xers accounted for 20% of home purchases last year, and they truly have the purchasing power— they make up 31% of U.S. income. They're comfortable having loans and are in their peak earning years right now. The median annual income for this generation is just under $105,000. Because of this, Gen Xers own the highest median-priced homes and largest homes. Additionally, they are the most ethnically and racially diverse group of buyers.
So What Does this Mean for Marketers? How do We Target Them?
It is crucial for marketers to tailor the message. As Gen X is the most skeptical generation, it is crucial to deliver your message as transparently as possible. Traditional promotional messaging will not work on this generation. Rather, you’ll want to focus on the precise monetary savings that you can provide in your mortgage offering. When communicating with Gen Xers, it’s important to empathize and listen to their financial needs. Show that you are there to be a helpful resource rather than a judge.
Although Gen X is a smaller generation when compared to baby boomers and millennials, Xers are a group than cannot be ignored. With high purchasing power and 27% of them in the market to buy larger homes, this segment has many viable prospects for mortgage borrowing. In order to turn prospects into customers, it’s important to remember that Gen Xers aren’t looking for a salesperson, but rather for a transparent resource who is empathetic to their needs.