It has been going around the real estate circles, discussed in corporate meetings and research groups, articles were written analyzing “the phenomenon” of why millennials just aren’t buying houses. But a recent reportfrom Ellie Mae’s Millennial Tracker seems to debunk the rumors through numbers.
According to the Tracker, refinances by these so-called Millennial group has accounted for 20 percent of all closed loans in the September, a three-percent boost from the preceding month. Of the 54 percent of all closed loans, 45 percent of which were refinances.
Released in May of this year, Ellie Mae’s Millennial Trackerapp tracks millennials’ loan trends in the US via an interactive online tool. It guides lenders on how to serve millennials better in their home-buying pursuits based on real-time available statistics. The tracker is a subset of Ellie Mae’s Origination Insight Report.
Ellie Mae defines millennials as those individuals 35 years old or younger or those who were born between 1980 and 1999.
- One of the reasons seen to contribute to this boost is the decrease in the average rate on home loans. This gives millennials more purchasing power.
- Compared to August’s input of $181,326, the average loan amount increased to $184,179. Meanwhile, the median loan amount for conventional loans decreased to $203,780 from the previous month’s $203,884. On the other hand, FHA’s average loan amount increased from $172,667 in August to $174,015 in September.
- The average FICO score of a millennial borrower is 726, an increase from the previous month – an inversely proportional relationship with the average rate on home loans that declined to 3.728 percent in September.
- A significant fraction of millennials chose conventional loans which accounted for 64 percent of all closed loans in September. FHA loans harbored 33 percent of the pie, a two-percent decrease from August.
Today’s mortgage rates continue to attract mortgage purchase and refi. And it’s looking like millennials are gaining traction in taking part in these activities than previously reported.