Findings from the most recent Ellie Mae Millennial Tracker have just been published, and it appears that the millennials are on the move, literally. Specifically, the report reveals that even though the housing inventory in the nation is continuing to stay tight, purchase activity among the millennial set is hotter than ever.
During the month of July, Ellie Mae reveals that the percentage of purchase loans that closed to millennials was an impressive 61%, showing an uptick of 5% from just the month previous (June). This 5 percentage point increase is not only impressive, but is in fact the highest purchase share for the millennial since March of this year.
Also increasing in July, according to the report, was millennials’ purchasing power. This rise was directly attributed to the dip in average interest rate for all loans closed (which fell to 3.25%). This dramatic dip was actually the lowest rate that has been experienced in Ellie Mae’s data tracking thus far.
Among the millennials, the report further broke down which sub-group was most responsible for closed purchase home loans. That award went to the younger millennials (those born from 1991-1999), 81% of which were loans closed for purchases, and the other 19% were for refinances. This was a far cry from the data shown for older millennials (those aged 30-40), whose percentages were 53% of loans for purchases and 46% for refinances.
It was also revealed that many among the younger millennial set availed themselves of available FHA loans during the month of July, specifically accounting for 97% of closed FHA loans for purchases. This marked the highest percentage in Ellie Mae’s recorded history of data tracking which first began in 2016. As for the FHA loans closed by older millennials? Those came in at 92% (for purchases).
Ellie Mae Chief Operating Officer, Joe Tyrrell, commented on this trend among millennials: “We’re seeing a new wave of younger millennial home buyers flood the market as we enter peak homebuying season. With interest rates at historic lows, now is the perfect time for younger millennials to purchase a home and start building equity."
Tyrrell added: "To encourage homeownership among the millennial generation, especially younger millennials, it is imperative lenders educate these borrowers on all loan types, including affordable options with less stringent credit requirements such as FHA loans.”