Millennials have continued to close purchase loans, despite rising interest rates, according to the latest Ellie Mae Millennial Tracker. Millennials are closing more purchase loans than refinance loans, with purchase loans comprising 89 percent of all loans closed by millennials as of September 2018, three percentage points higher than a year earlier. Most of these loans, 88 percent, were conventional loans. Conventional loans are up by seven percentage points year over year.
“Despite rising interest rates, millennials are still looking to buy homes,” said Joe Tyrrell, EVP of Corporate Strategy for Ellie Mae. “We’re still seeing the majority of millennial loans fall into the conventional loan category, and with interest rates increasing, there is an even greater opportunity for the industry to educate these buyers on all of the options that they have available to them, including some of the higher loan-to-value products and FHA loan programs.”
Conventional loans makeup 68 percent of all loans closed by millennials in September, while 27 percent of closed loans were FHA loans and 2 percent were VA loans.
Other findings in the Millennial Tracker include data on who is borrowing. Ellie Mae found that millennial males make up 61 percent of primary borrowers on loans closed in September, while women made up 32 percent, with the rest not listing a gender. The average age of these young buyers was 29.7, relatively unchanged from 29.8 in July and August, and 29.4 a year ago.
Across all home loans, it took an average of 42 days to close last month. Year over year, it took two days longer at 44 days to close. Purchase loans took an average of 41 days to close last month, compared to an average of 42 days to close a year ago. Refinance loans closed in 45 days last month, on average, compared to 46 days in 2017. Twenty-eight percent of closed VA loans in September 2018 were for refinances, up from 21 percent the month before.
Find the complete Ellie Mae Millennial Tracker here.