Scores of millennials leaped at the chance to refinance their mortgages in September, according to the latest Ellie Mae Millennial Tracker. During that month, there was an acceleration of 43% leap in refinances of all closed loans among that age group—a 3% boost from the previous month. This generation’s increased refinancing is likely because millennials are seduced by interest rates approaching 3% for all loans.
During September, refinances accounted for 51% of Conventional loans—the highest since June. It was up from 48% just the month prior.
As for older millennials, in September, on average, they locked in slightly higher rates of 3.00%. Younger millennials, on the other hand, obtian3ed rates for 2.98%. In the face of historically low interest rates, among both sub-groups of millennials, there was a bump in the share of refinance loans.
Even though millennials are scooping up homes, purchases dipped for the second consecutive month in the waning days of summer. That accounted for 56% of all closed loans, which sagged from 59% in
“We have seen a steady increase in refinances among millennials over the past month, as homeowners took advantage of historically low interest rates,” said Joe Tyrrell, president, ICE Mortgage Technology, a division of IntercontinentalExchange, Inc. (NYSE: ICE). “However, the bulk of the millennial generation is still entering the market as first-time homebuyers and they’re swooping up the limited inventory that is available in most markets.”
In a recent interview with MReport about the current refinance boom whether prospective millennial buyers could be “spooked” out of the market, Joe Tyrrell, who serves as the COO for Ellie Mae and oversees technology, product strategy, product management, and business and corporate development efforts involving the Ellie Mae Digital Lending Platform, said he was “amazed” to see what's happening.
“We’re tracking applications on a daily basis and just when you think things are going to tail off, you see an additional spike,” he noted. “Originally, we thought the refinances would probably last through the first quarter and be replaced by what was expected to be a pretty strong purchase market.”
Globally with the pandemic, he added, “we’re seeing that the purchase market is likely to get pushed deeper into the year. Although, we still expect that there will be a purchase market—probably not during April, May, or June, but it will more likely shift to June, July, and August timeframe, provided things start to improve and curves start to get flat relative to COVID-19.
He said he was surprised to see how strong this refi market has been and the potential for it to have a second wave. “What we’ve been tracking very closely is the interest rate environment and seeing how consumers are taking advantage of it.”