A slow economy has low rates, and a fast-paced economy has high rates. Put another way, low rates tend to stimulate borrowing, helping economic growth, where as higher rates tend to slow down borrowing. Orion’s management mentions this because two weeks ago investors seemed concerned about economic growth after a slew of soft data on the labor market and historical September weakness. But last week the narrative reversed after traders received inflation data that cemented expectations of a Federal Reserve interest rate cut this Wednesday ,probably 25 basis points, or .25 percent.

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But more important than daily or weekly investor opinions about the direction of interest rates for Orion’s brokers and your clients is how the demographics of the United States are changing. There are more people born between 1980 and 1999(what the Census Bureau defines as Millennials) than any other generation. Their economic clout is obvious. How have economic conditions over the last several years affected the job market for Millennials, which in turn impacts their ability to buy a home?

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A greater number of young adults are now employed in leisure & hospitality, and retail industries than in prior years. (Insert joke about avocado toast.) These two industries employ the largest share of Millennial workers, and a growing number of young adults are finding employment in these low-paying sectors. About 45% of employees in the retail sector and 60% in the leisure & hospitality sector are Millennials.

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Traditionally, most young adults have found employment in industries that require few skills and more flexible hours. This has held true among the Millennial generation, especially during times of economic weakness. Millennials also moved into lower-paying industries at a faster rate than their older counterparts. Conversely, the construction and financial industries have evidenced a decline in the share of young workers and the manufacturing and information industries employ the least amount of young adults. In many cases immigrants have filled in.

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What does this mean for Orion’s brokers and your clients who are focused on the lending and housing market? If indeed younger people are filling out the ranks of lower-paying jobs, brokers know that they tend to have lower incomes and take longer to save for a down payment. If they have to pay for a real estate commission on top of that, given recent changes in how agents are paid, that is even more of a burden. Orion has developed some creative programs, and with them various underwriting policies, in order to encourage first time home buyers who will lead to current homeowners being able to move up. And there are always parents…

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Brokers report that interestingly, many markets continue to do very well, especially city centers. At this point Millennials prefer urban areas near mass transit: a local trainline is more important than a big garage. There are plenty of developers who will successfully target exactly that. And demand for starter homes continues to be robust.

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