- 4 hours ago
For many first-time homebuyers, the biggest barrier to homeownership is knowing where to start. Kristin Messerli of FirstHome IQ joins Allison LaForgia for a conversation about the role that financial literacy plays in preparing the next generation for homeownership and why the housing industry needs to rethink where that education begins. From understanding credit and budgeting to navigating the emotional side of buying a home, Messerli explains why waiting until someone is actively buying a home to teach these fundamentals puts consumers at a disadvantage. Too often, first-time buyers are learning critical financial concepts while simultaneously being asked to make one of the biggest financial decisions of their life.
Messerli also shares how professionals can meet prospective buyers where they are, rather than waiting until someone is ready to transact, by becoming trusted resources in their communities. For an industry focused on generating new buyers, the opportunity lies in building financial confidence and trust long before the transaction begins.
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00:10kristin welcome to 10 minute talks thank you so much so i'm so excited to sit down with you
00:18we talked about how i've been seeing all of this conversation on social media in person there's
00:26all these resources coming out where we're hearing more parents talk about teaching their kids and
00:31young adults about financial literacy where do you think as an industry we should really start
00:37connecting financial literacy to homeownership well i think it is i mean it's obviously connected
00:45there's so many pieces that you need to understand about financial literacy in the process leading up
00:51to buying a home and most people are so confused about all of it so they're trying to learn about
00:57credit and budgeting and all these basic components to financial literacy at the pump at the moment that
01:03they are buying a home which is why i'm really interested in engaging this industry on how we
01:08teach financial literacy because it is the moment that people are actually learning these things
01:14i feel like there's a lot of conversation not just anecdotally but that we see online around this
01:21misconception that young americans have that the dream of homeownership is unrealistic for them
01:27what do you think is driving that disconnect between aspiration and confidence and how much of it do you
01:34think fundamentally comes down to really not understanding the home buying process yeah no it's actually i mean
01:42it's interesting especially in the last few years we've seen the percentage of people that say
01:47homeownership is a good investment drop in our data from i think it was like 87 percent to 41 percent
01:54or
01:54some something like that it was pretty dramatic um but we're also seeing skepticism continue to rise
02:00not just around buying a home but also around working with industry professionals um loan officers or real
02:07estate agents and so there's a lot of fear and anxiety and yet there's high um belief that they that
02:15homeownership does equal security in some way so what we've i haven't even released this data yet but
02:21we found some data in a new study around how um people believe that homeownership is where they want
02:27to put their money like there's a sense of security there and that home ownership specifically creates that
02:33security but that they feel that having a mortgage is a trap in some way so there's like this conflicting
02:39feeling that i think a lot of people have um and in our last report we talked about how homeownership
02:45is very much still connected to the american dream for the next generation um so there's a lot of i
02:52think
02:52anxiety confusion overwhelm and all of that around what homeownership means for them and that in and of
02:59itself combined with the lack of financial literacy is actually preventing people from going through the process
03:05you just mentioned how research that you've done at first home iq has shown that younger buyers are genuinely
03:13overwhelmed by the amount of information that is available to them and about the whole process in general
03:18we've seen increasing trends from information consumption an information consumption
03:24standpoint where they're increasingly turning to non-traditional sources like youtube or in social media for answers
03:33how do you think the housing industry can better meet first-time homebuyers where they are instead of
03:40sitting on the back end and expecting them to figure out the system on their own
03:45yeah i think for one we have to understand that youtube and social media and all of that is now
03:50a
03:50traditional source of education especially for the next generation but i think for everyone i mean
03:55year after year i think it's been the last four years that we've seen youtube come up as the number
04:00one
04:00source people go to for um home ownership education in our next gen home ownership um series so i you
04:08know
04:08i think there's that there's ai there's uh more comfortability in in going places where they are not
04:14going to feel stupid asking questions and i think that there's you know there's the overwhelm but there's
04:20also this like shame which does connect back to what are their early experiences around money and how has
04:27money been talked about in the home or not talked about um so going to places like youtube or ai
04:34can
04:35help relieve some of that anxiety in some ways where they are building some confidence um it also can
04:41create some overwhelm so as an industry professional i think you showing up as a guide to say hey why
04:48don't
04:48you watch this series of videos you can always direct people to our non-profit first home iq's videos or
04:54some other third party source where there's education that is going to feel safe for people
05:00to consume um also i think showing people that it's like giving people calculators things that allow
05:07people to play around with the numbers for themselves so that they come out feeling empowered
05:12um i always go back to there's a framework we used in in social work or that people use in
05:18social work
05:18called trauma informed care and it's for people who are particularly skeptical so it works really well here
05:25um but one of the the components of that is creating a sense of safety and so first and foremost
05:31you want
05:31people to feel that they are safe asking questions that there's transparency around the process um
05:38and ultimately all of this is leading to empowerment so you want the consumer to feel that they are empowered
05:44and that you are a guide in that process so i think it's great if people can create social content
05:50youtube content all of that but i think more important it's about you guiding them through that
05:54that's such an interesting point because i think of my friends and the questions that they have about
06:02things and they're definitely more interested in playing around with resources before they go talk to
06:08someone so that they don't feel like they're misrepresenting themselves or so they're not
06:14disappointed when they go in that they have a good expectation of how those conversations are gonna go
06:21yeah i have a very very intelligent friend who had saved plenty for his down payment and he had asked
06:28me
06:28um you know like some questions and i was like it's time for you to talk to a loan officer
06:33let me introduce
06:34you to somebody and um and he pushed back really hard he was like no no no i i need
06:39to play around
06:39with the numbers some more and i thought this is this is exactly the situation that so many people are
06:45in they're nervous about starting that conversation and so i actually sent him some of the first home
06:50iq resources that um you can like make a plan at learn.firsthomeiq.com he played around with the
06:56numbers and then he said okay now i can talk to somebody and i i think that is actually a
07:02really crucial
07:02part of this process now that people need to feel more comfortable um like you said not worried that
07:10they're going to be disappointed or that they're going to say something stupid and um and then they're
07:15going to be relieved when they have a good conversation with you but that interim step is what
07:19is actually going to make or break the deal for a lot of people are they going to get to
07:24the place
07:24where they have the confidence to have a conversation i think that we can agree that the financial
07:30education aspect of this and homeowner education home ownership education needs to happen much
07:36earlier how do you think mortgage and real estate professionals can lean into that educator role
07:43so there's a lot of different ways to do this we have some ambassadors who are actually going into
07:49schools and leading conversations in high schools and colleges but you don't have to do that you can also
07:56leverage just your database i mean that every person that has a kid is trying to figure out how to
08:02teach
08:02them financial literacy i mean none of them learned this when they were growing up and they also often
08:08are making mistakes and and you know i mean they even say that the your um the research shows that
08:13our
08:13money habits are ingrained by the age of seven so it it can't even happen too early you know where
08:20you're at least starting some conversation so where you can step in and say hey let's um do a financial
08:27literacy series for all all of my past customers and bring your kids or let's talk about how to have
08:34these conversations with your kids um no matter what age they are i think that's a great way to bring
08:39value to your community it's showing up with your expertise and then you're re-engaging people that are
08:45going to buy again in the future and um and then probably building a referral base out of that so
08:51i
08:51think that's um you know one way to do that of course just continuing to put out content youtube social
08:57media um that type of thing is also going to be helpful i think that's such an interesting point
09:03because i feel like increasingly especially people under 40 who are really looking to buy their first home
09:12are sort of hesitant to talk to their parents about it but might want to do their own research
09:19and then might want to talk to somebody who's an actual professional and understands things because
09:25i mean if you think about how often one person buys a home you don't remember all of the pieces
09:31it's a
09:32very complex process right so however you're if your parents have lived in their homes for 10 or 15 or
09:3920
09:39years your process could look totally different from theirs yeah and i think we've talked about this
09:45but i mean buying a home 30 years ago is just a different thing than buying a home today you
09:51know
09:51and i think that it's easy to forget that and um and it's important that we we show up with
09:57compassion around um you know the fact that things are different today and saving for a down payment
10:03looks very different today than it did back then but uh but yeah even for someone like i bought a
10:09home just
10:09five years ago and i have been in this industry most of my life and i still feel like oh
10:16you know there's some anxiety if you start thinking about going through that process again
10:21um so i think that having those conversations is challenging for the parents but also for the kids
10:27they are um they're like you said they're wanting multiple sources not just to hear from their parents
10:34they're going to want to hear from experts and other people that have gone through the process like
10:38them um so any way that you can show up in that you know in that circle as a resource
10:46and that's
10:46really important i would say too of just showing up as an educator in your community and kind of framing
10:52your brand around that versus saying you're there for the transaction you know of course you're not
10:59going to have those conversations early and a lot of our data shows that people the majority of people
11:04are feeling that they're going to be taken advantage of by a loan officer or a real estate professional
11:09so they're not going to want to have that conversation unless you have shown up as someone who
11:13they believe they're not going to be taken advantage of in that early conversation
11:18now if you could change one thing about the way that we as an industry of real estate and mortgage
11:24professionals support first-time homebuyers what would it be i think that it's exactly what we've
11:32been talking about around showing up as an educator and um and i think that that means creating this
11:40interim space well before someone is actually ready to buy a home um so that's that's really what i have
11:48devoted a lot of my time and resources around is how do we help people show up for the next
11:54generation before they're ready to buy so that you are um either showing up in their news feed with
12:00resources or in their community um you know with the parents that type of thing but so many people
12:07are just held back because they don't have someone safe that they can talk to um and i think if
12:13you're
12:13able to show up as an educator in your community you're going to unlock a lot of potential homebuyers that
12:18way if you could define what a better path to first time home ownership looks like what would that
12:26path look like a better path i think would look like if someone were able to i mean i i
12:33think we're
12:34building it i i think we're we're close i mean if someone is has a question they can now play
12:40around
12:40on ai and they can go to you know youtube and all of that but where i think this is
12:47broken is that they
12:48stop there a lot of times and so if there is that next step that is before someone is actually
12:55ready
12:56to buy that they are going from okay i'm just exploring this to okay i'm playing around with
13:01my numbers i'm taking some next steps but i'm not actually um you know ready to to make that
13:09transaction happen that's where we start seeing a new opportunity grow for people to unlock first
13:16time homebuyers um so going from exploring this with ai education that's really exciting we're
13:22we're kind of there building that but now let's open that or build a bridge between that and the um
13:28the moment that someone's ready to buy um and that's you know obviously what we're doing at first
13:33home iq but a lot of people out there are building those bridges and i think that's really exciting
13:38well kristin i think that you are absolutely at the forefront of this thank you so much for
13:44spending 10 minutes with me and to our audience for more information about first home iq and
13:51to access all of the resources that kristin mentioned check out the links below
13:55you
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