Although interest rates didn’t show any signs of dropping digits over the summer season, that didn’t seem to deter homebuyers, according to August data logged by Ellie Mae’s Millennial Tracker.
Conventional loans stayed the course, holding at 64 percent of all closed loans by millennial buyers. Also keeping with the status quo, FHA mortgages hovered at a market share of 32 percent—the same figure that agency has been posting since June, the report noted.
Additionally, the average dollar amount for loans closed by millennial borrowers in August tallied $185,919, a negligible uptick from $184,113 recorded in August 2016. This was notwithstanding the fact that the average 30-year note increased to 4.211 percent from 3.706 percent in 2016.
The average millennial primary borrower was a 29.4-year-old who used their $185,919 conventional loan to purchase a home with an average appraised value of $223,882. This person had a FICO score of 724, which enabled them to secure their 4.211 percent loan. They closed on their home in 44 days. The majority (64 percent) of primary borrowers were male, and more than half (52 percent) were married.
On the West Coast, the average millennial borrower was a bit older—30.6—and took out a loan of $314,579 on average. In the Midwest, however, average loan amounts trended lower. For instance, homebuyers of age 29.5 in Kansas closed loans averaging $158,584. Island-hopping over to Hawaii, the average borrower there was a 31.4-year-old taking out a $396,766 loan.
On the whole, millennials were most likely to close loans for the purpose of purchasing a home (87 percent). Refinances made up 12 percent of loans closed by millennials in August.
“Average loan amounts in August of this year were slightly higher than last year, despite higher interest rates,” said Joe Tyrrell, EVP of corporate strategy for Ellie Mae. “As tends to happen with tight inventories, this is a seller’s market, and many of today’s homebuyers may be faced with paying a premium for the same home they might have bought for less last year. For those who are committed to buying a home, though, slight increases in competition, costs, or interest rates will likely not deter them.”