Despite fierce competition for affordable homes in many markets this spring and summer, the percentage of conventional purchase loans to millennial homebuyers has increased, compared to the same time period a year ago, according to the latest Ellie Mae Millennial Tracker.
In August, 69 percent of all loans taken out by millennials were conventional loans, the highest percentage since February 2015, and up from 64 percent in August 2017. FHA loans represented 27 percent of all closed loans, down from 32 percent the year prior. VA loans remained flat year-over-year at 2 percent. Three percent were undisclosed, according to the August report.
Additionally, 89 percent of closed conventional loans to millennial borrowers were for purchases, compared with August 2017, where only 84 percent of closed conventional loans were for new home purchases. Overall, purchases represented 90 percent of closed loans to millennials in August, compared with 87 percent at the same time last year.
“As the industry continues to understand millennials and the new paradigms that a gig economy brings, we are seeing conventional loan products that are able to meet the needs of this important home-buying generation,” Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae, said in a release.
Some findings from the August 2018 Ellie Mae Millennial Tracker includes:
- Millennial males (both single and married) were listed as the primary borrower on 61 percent of closed loans in August. Women were listed on 32 percent;
- Nine percent of all home loans to millennial borrowers were for refinances, while 10 percent of conventional loans were for refinances, both up one percentage point from the month prior;
- Days-to-close all loans dropped to 41, one day shorter than in July, and three days faster than in August 2017;
- The average millennial FICO score was 722, down from 723 in July and 724 in August 2017; and
- The average age of all millennial borrowers held steady at 29.8 and essentially flat from August 2017, at 29.4.