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Millennial Borrowers Closing More Purchase Loans as Share of Refinances Drops, Latest Ellie Mae Millennial Tracker Finds

PLEASANTON, Calif.--(BUSINESS WIRE)--

Despite a rise in interest rates and tight inventory, Millennials closed a higher share of purchase loans year-over-year in December 2018. According to the latest Ellie Mae Millennial Tracker, share of purchase loans rose 4 percent, accounting for 88 percent of all loans closed by members of the generation in December, compared to 84 percent for the same month in 2017. With interest rates for all 30-year loans reaching 5.12 percent on average, the highest since Ellie Mae began tracking this data in 2016, refinance rates dropped 5 percent year-over-year, comprising 10 percent of all closed loans in December 2018.

For all loans closed by Millennials in December 2018, 68 percent were Conventional, and 27 percent were FHA, while VA and other loans accounted for 2 and 3 percent respectively. The share of Conventional purchase loans increased from 80 to 87 percent from December 2017 to December 2018.

“Many Millennials are prioritizing homeownership and rather than being deterred by a tight market, they’re increasingly competing for available homes or moving to areas where inventory is more robust,” said Joe Tyrell, executive vice president of corporate strategy for Ellie Mae.

Added Tyrrell, “The average age for a Millennial homebuyer in December was 29.5 years old, the lowest for any month in 2018. This may be driven in part by younger borrowers who no longer feel the need to wait for a typical life event like marriage before buying a home. In fact, from 2016 to 2018, 63 percent of borrowers between the age of 20 and 29 were single when they closed their loans.”

Additional findings from the December 2018 Ellie Mae Millennial Tracker include:

  • Thirty-year rates on both Conventional (5.09 percent) and VA (4.86 percent) loans reached their highest mark since Ellie Mae began tracking the data in 2016. Average FHA loan rates remained at their highest point in December at 5.18 percent, matching the average figure from November 2018.
  • The average FICO score for Millennial borrowers on all closed loans dropped to 721, down slightly from 722 in December 2017.
  • On average, all home loans closed in 43 days, flat from the previous year. Refinance loans closed in 46 days, up 1 day from 45 in December 2017. Purchase loans closed in 41 days in December 2018, compared to 42 days the previous December.
  • Millennial males (both single and married) were listed as the primary borrower on 60 percent of closed loans in December. Women were listed on 32 percent and the remainder of closed loans did not specify primary borrower gender.
  • For all closed loans in December 2018, 52 percent of Millennial borrowers were married while 48 percent were single. These figures were flat from December 2017.

Ellie Mae® (ELLI) is the leading cloud-based platform provider for the mortgage finance industry. The Ellie Mae Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. It mines data from a robust sampling of approximately 80 percent of all closed mortgages dating back to 2014 that were initiated on Ellie Mae’s Encompass® all-in-one mortgage management solution. Given the size of this sample and Ellie Mae’s market share, it is a strong proxy of Millennial mortgage indicators across the country. Searches can be tailored by borrower geography, age, gender, marital status, FICO score and amortization type. For more information, visit http://elliemae.com/millennial-tracker.

ABOUT THE ELLIE MAE MILLENNIAL TRACKER

The Ellie Mae Millennial Tracker focuses on Millennial mortgage applications during specific time periods. Ellie Mae defines Millennials as applicants born between the years 1980 and 1999. New data is updated on the first Monday of every month for two months prior. The Millennial Tracker is a subset of our Origination Insight Report, which details aggregated, anonymized data pulled from Ellie Mae’s Encompass origination platform. Additional information regarding the Origination Insight Report can be found at http://elliemae.com/resources/origination-insight-reports. News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.

ABOUT ELLIE MAE

Ellie Mae (ELLI) is the leading cloud-based platform provider for the mortgage finance industry. Ellie Mae’s technology solutions enable lenders to originate more loans, reduce origination costs, and shorten the time to close, all while ensuring the highest levels of compliance, quality and efficiency. Visit EllieMae.com or call 877.355.4362 to learn more.

© 2019 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, Mavent®, Velocify®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

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