Meet your future customers: Generation Y

Many of them wear multiple piercings, own a cell phone that takes pictures and they're even more technologically savvy than their older brothers and sisters of Generation X.

They're Generation Y – and many of them are going to be your customers very soon.

The label "Gen Y" roughly refers to those born between 1979 through today. And at 60 million strong, more than three times the size of Generation X, they're the biggest thing to hit the American scene since the 72 million baby boomers.

Gen Yers also have lofty financial and personal goals and fully expect to meet them, according to the book, In Managing Generation Y, by Bruce Tulgan and Carolyn A. Martin, Ph.D. In fact, most surveys of Gen Yers report that they expect to earn very high salaries by the time they are 30 years of age. And with high salaries come big houses.

And enough of them are buying homes already. The number of sales to buyers under the age of 25 rose to 345,000 in 2003, up 20 percent from 287,000 in 2001, according to the National Association of REALTORS®' (NAR) statistics. Sales to that age group outpaced home sales in general, which rose 15 percent from 2001 to 2003.

There are a lot of factors playing into this trend. Of course, we can thank the low interest rates and flexible loan options for much of the growth in this age group. But there's also been an increase in homeownership education efforts by the media, the Department of Housing and Urban Development (HUD) and realty firms.

Further, there's more awareness nowadays of the investment and tax break advantages of owning one's own home. Plus, many of them are just plain tired of seeing their money disappear in rent each month – and living at home with the folks is not always an option for them.

And if they can't afford to buy, in some cases, mom and dad help foot the bill for their home. Parents who qualify for the Federal Housing Administration's (FHA) so-called "kiddie condo" program are allowed a 3 percent down payment and tax break if they cosign a mortgage for their college-enrolled children. Parents see the home as an investment that will pay off more than shelling out $300 to $400 a month for a dorm room or apartment rent.

Most real estate professionals say they see good prospects for home-buying students because parents support them financially, and after graduation they usually get jobs. In fact, one agent told the Louisville Kentucky Journal, "I've had med student clients who have a minimal amount of income. But because they're going to graduate and get a job, they can get a loan based on their potential income."