Graph showing declining on a tvThe fervor about marketing to Millennials peaked for me during the National Association of REALTORS® Convention in New Orleans last week.

Surely you’ve seen some of the recent headlines: “Millennials could hold the key to housing recovery,” “Millennials need to be wooed,” “Insights about Millennials’ path to homeownership,” etc.

One of the seminars at NAR had this in its title:” “Generating Referrals from Millennial Home Buyers.”

Say what?

Try this headline: Millennials are broke.

Yes, Millennials (a.k.a. Generation Y), those who ages range from about 19 to 38, may comprise the largest segment of the U.S. population at 86 million strong, but they don’t have any money. They are student debt rich and cash poor.

Worse they don’t make much either.

Millennial Malaise

I was awakened by this fact by one of my favorite daily bloggers, economist Elliott Eisenberg, Ph.D. who pens a 70-word blog five days a week (see

He shared these facts:

  • In 2010, households headed by those under age 35, the Millennials, had median income of $37,600, now it’s just $35,300.
  • Worse, 41.4% of them have student loans, up from 33.6% in 2007 and 23.3% in 1998
  • Their student loan balances are up from $10,000 in 1988 to $17,300 in 2013.
  • Moreover, just 38.6% hold equities, down from almost half in 2001.
  • Their median net worth is a paltry $10,400

Re-read these numbers: Median income is $35,300 and median net worth is $10,400.

If you do the mortgage math and assume all of their other monthly debt totals no more than $500, the maximum home the average Millennial can afford is about $87,000.

That’s why Millennials are renting, or living in mom and dad’s basement.

The total student debt number in America is staggering: Over $1 Trillion – that’s $1,000,000,000,000 dollars, more than double what it was just 8 years ago. As demographer Peter Francese told Barron’s,“These people have a mortgage and no house.”

And they are not just talking out loans, they are defaulting on them: Ten percent of all borrowers defaulted on their student loans in the most recent year available, the highest since 1995. That’s going to kill a lot of credit scores for a very long time.

“Hopefully, they are saving,” said the NAR Chief Economist Lawrence Yu during his press conference last week, who also noted job creation will help them significantly. But half will still likely be renters. For those that want to buy, Yu also suggested that Millennials’ boomer parents might foot the bill and buy their kids a home.

That’s a great theory, but if it does come to fruition, think about this: Who do you think will influence their home purchasing decision? The boomers, because it will be their money their kids will be using.

When you dissect the Millennial market, you have to wonder why all the buzz about targeting Millennials as home buyers?
The Case for Boomers

I think we are simply chasing the next shinny object instead of looking at the what’s available to us now: Baby boomers.

Dissect the Boomer market and it will make you forget about Millennials for a very long time in terms of where your marketing should be focused today, tomorrow and the next several years:

  • 80 million boomers are ages 50 to 68
  • Next year, those aged 50 and older will comprise 45% of the US population
  • The 55+ group has 75% of the wealth of America
  • 50+ group has $2.4 trillion in annual income, or 42% of all after-tax income
  • They outspend other generations by $400 billion a year
  • They are going to be richer, much richer: We are on the verge of the greatest transfer of wealth in history as the Greatest Generation passes $12 Trillion to the boomers

The Bottom Line

We’re spending way too much time, energy and marketing dollars focusing on a market that isn’t ready to buy any time soon, and more importantly, largely incapable of buying now: It will be years away for most, perhaps a decade for many.

Yes, someday it will make sense to spend the majority of our marketing money targeting Millennials homebuyers. After all, when the Boomers pass on, Millennials are in line to inherit an estimated $37 trillion in their wealth. But that’s a long ways away and the boomers have the dollars to spend on homes – that’s plural – today. That’s where most of our focus should be.

At best, Millennials are a marginal market.