In the next five years, a whopping 66.1% of millennials are expecting to buy homes.
That kind of demand from the largest generation in American history certainly doesn’t go unnoticed – and it’s enough that it will help to shape the direction of the real estate industry itself.
Each generation is different, so it’s no surprise that millennials have their own set of unique attitudes towards home buying.
Today’s infographic from Nationwide Mortgages takes a look at some of these differentiating factors, and provides some insight into how these preferences will create the drivers that ultimately affect the market as a whole.
It’s clear millennials are approaching the housing market in their own way that makes them unique from past generations. But what is it specifically that differentiates millennials in their attitudes and behaviors towards real estate?
Why Millennials Are Unique
As a group that grew up in the iPhone era, it’s obvious to say that millennials prefer to approach home buying in a more digital fashion, but they actually have other differences with Gen X and the Boomers that go much deeper.
To start, millennials much prefer to trust real estate agents than other generations. Only 8% of millennials did not use a realtor for their home purchases, while 13% of younger Boomers and 15% of older Boomers could say the same. Whether this is because of a lack of experience in the market, or because different attitudes towards agents, it’s hard to say.
Next, millennials associate buying a house with the American Dream at a higher rate (65.3%) than other groups. They do so even more than the Silent Generation (63.9%) – the group that grew up during World War II, and reaped the benefits of the post-war economic and housing booms.
Lastly, there are some other areas where millennials just have different preferences and attitudes towards owning a home. For example, they are less likely to define homeownership as permanent (11%), and consider their purchase only as a stepping stone towards the house they want (68% for millennials vs. 36% for all buyers). On top of that, they want very specific features in any home they buy – including things like new appliances, energy efficiency, big kitchens, home office space, proximity to work, and new technology in their homes.
Though some of the things that millennials want are treasured by other generations as well, millennials are having an impact on the industry just by the nature of their growing influence on the market. And for anyone that’s selling a house or making investments in real estate, this is a factor that should be taken into account.
Animation: The 20 Largest State Economies by GDP in the Last 50 Years
This animation shows how the largest state economies by GDP have changed over the last five decades of time, and what such a ranking looks like today.
Animation: The 20 Largest State Economies by GDP
When it comes to understanding the size and scope of the $18 trillion U.S. economy, it’s sometimes easier to consider that it’s the sum of many parts.
Many states already have economies that are comparable to some of the world’s largest countries, giving you a sense of what they might be combined.
And while every state plays a role in the bigger picture, some states such as New York and California have an outsized impact on fueling the country’s overall economic engine.
The State of State Economies
Today’s animation comes to us from SavingSpot, and it covers the size of state economies by GDP going back all the way to 1963.
The video uses inflation-adjusted data from the U.S. Bureau of Economic Analysis, showing how the ranking of top state economies has changed over time as different states have taken advantage of economic booms.
Let’s dive into the data to see how things have changed.
Going Back in Time
The earliest data in the animation comes from 1963, when New York led the pack with a $70.6 billion economy in inflation-adjusted terms.
State Economies by GDP, Inflation-Adjusted Chained $USD (1963)
|Rank||State Economy||GDP, Billions of USD (1963)||Share of U.S. Economy|
|🇺🇸 United States (Total)||$607.0||100.0%|
|#30||District of Columbia||$5.1||0.8%|
California ($67.8 billion), Illinois ($39.5 billion), Pennsylvania ($34.5 billion) and Ohio ($33.3 billion) round out the top five, and together they added up to 40.5% of the national GDP.
The Largest State Economies by GDP Today
Looking at the most recent data from 2017, you can see the ranking changes significantly:
State Economies by GDP, Inflation-Adjusted Chained $USD (2017)
|Rank||State Economy||GDP, Billions of USD (2017)||Share of U.S. Economy|
|🇺🇸 United States (Total)||$18,051||100%|
|#35||District of Columbia||$122||0.7%|
California is the largest economy today – it has a state GDP of $2.6 trillion, which is comparable to the United Kingdom.
Meanwhile, Florida and Georgia are two states that did not crack the top 10 back in the 1960s, while Texas jumped up to become the second largest state economy. It’s actually not a coincidence that all of these states are in the southern half of the country, as air conditioning has played a surprisingly pivotal role in shaping modern America.
In fact, the share of the nation’s population living in the Sunbelt rose from 28% in 1950 to 40% in 2000, and this increase in population has coincided with economic growth in many of the states that used to be a sweaty mess.
A Final Look
Here is a final animated version of the top 10 largest states by GDP, also provided by SavingSpot:
Where the World’s Banks Make the Most Money
Last year, the global banking industry cashed in an impressive $1.36 trillion in profits. Here’s where they made their money, and how it breaks down.
Where the World’s Banks Make the Most Money
Profits in banking have been steadily on the rise since the financial crisis.
Just last year, the global banking industry cashed in an impressive $1.36 trillion in after-tax profits — the highest total in the sector seen in the last 20 years.
What are the drivers behind revenue and profits in the financial services sector, and where do the biggest opportunities exist in the future?
Following the Money
Today’s infographic comes to us from McKinsey & Company, and it leverages proprietary insights from their Panorama database.
Using data stemming from more than 60 countries, we’ve broken down historical banking profits by region, while also visualizing key ratios that help demonstrate why specific countries are more profitable for the industry.
Finally, we’ve also looked at the particular geographic regions that may present the biggest opportunities in the future, and why they are relevant today.
Banking Profits, by Region
Before we look at what’s driving banking profits, let’s start with a breakdown of annual after-tax profits by region over time.
Banking Profit by Year and Region ($B)
|Rest of World||$196||$243||$265||$285||$309||$327||$348||$361||$387||$421|
In 2018, the United States accounted for $403 billion of after-tax profits in the banking sector — however, China sits in a very close second place, raking in $333 billion.
What’s Under the Hood?
While there’s no doubt that financial services can be profitable in almost any corner of the globe, what is less obvious is where this profit actually comes from.
The truth is that banking can vary greatly depending on location — and what drives value for banks in one country may be completely different from what drives value in another.
Let’s look at data and ratios from four very different places to get a sense of how financial services markets can vary.
|Country||RARC/GDP||Loans Penetration/GDP||Margins (RBRC/Total Loans)||Risk Cost Margin|
1. RARC / GDP (Revenues After Risk Costs / GDP)
This ratio shows compares a country’s banking revenues to overall economic production, giving a sense of how important banking is to the economy. Using this, you can see that banking is far more important to Singapore’s economy than others in the table.
2. Loans Penetration / GDP
Loans penetration can be further broken up into retail loans and wholesale loans. The difference can be immediately seen when looking at data on China and the United States:
|Country||Retail Loans||Wholesale Loans||Loan Penetration (Total)|
In America, banks make loans primarily to the retail sector. In China, there’s a higher penetration on a wholesale basis — usually loans being made to corporations or other such entities.
3. Margins (Revenues Before Risk Costs / Total Loans)
Margins made on lending is one way for bankers to gauge the potential of a market, and as you can see above, margins in the United States and China are both at (or above) the global average. Meanwhile, for comparison, Finland has margins that are closer to half of the global average.
4. Risk Cost Margin (Risk Cost / Total Loans)
Not surprisingly, China still holds higher risk cost margins than the global average. On the flipside, established markets like Singapore, Finland, and the U.S. all have risk margins below the global average.
Future Opportunities in Banking
While this data is useful at breaking down existing markets, it can also help to give us a sense of future opportunities as well.
Here are some of the geographic markets that have the potential to grow into key financial services markets in the future:
- Sub-Saharan Africa
Despite having 16x the population of South Africa, the rest of Sub-Saharan Africa still generates fewer banking profits. With lower loan penetration rates and RARC/GDP ratios, there is significant potential to be found throughout the continent.
- India and Indonesia
Compared to similar economies in Asia, both India and Indonesia present an interesting banking opportunity because of their high margins and low loan penetration rates.
While China has a high overall loan penetration rate, the retail loan category still holds much potential given the country’s population and growing middle class.
A Changing Landscape in Banking
As banks shift focus to face new market challenges, the next chapter of banking may be even more interesting than the last.
Add in the high stakes around digital transformation, aging populations, and new service opportunities, and the distance between winners and losers could lengthen even more.
Where will the money in banking be in the future?
Markets7 months ago
The Jeff Bezos Empire in One Giant Chart
Maps10 months ago
Mercator Misconceptions: Clever Map Shows the True Size of Countries
Advertising6 months ago
Meet Generation Z: The Newest Member to the Workforce
Misc9 months ago
24 Cognitive Biases That Are Warping Your Perception of Reality
Advertising5 months ago
How the Tech Giants Make Their Billions
Technology8 months ago
The 20 Internet Giants That Rule the Web
Chart of the Week7 months ago
Chart: The World’s Largest 10 Economies in 2030
Environment6 months ago
The World’s 25 Largest Lakes, Side by Side