The share of refinances closed by millennials in October increased month-over-month, reaching a new high, as interest rates on 30-year loans continued to decrease, according to the latest Ellie Mae Millennial Tracker.

In October, 34 percent of all loans closed by millennials were refinances, up 1 percent month-over-month, marking the highest refinance share since Ellie Mae began tracking the data in January 2016.

Refinances made up 41 percent of conventional loans closed by millennials, up slightly from 40 percent in September, while the refinance share for FHA loans stayed flat month-over-month at 10 percent. For VA loans, refinance share decreased to 42 percent, down 6 percentage points from the previous month, Ellie Mae said.

The average interest rate on all 30-year loans fell once again, dropping to 3.9 percent from 3.91 percent the month prior. October marked the second straight month that the average interest rate on all 30-year loans remained below 4 percent. Before September, it had not fallen under 4 percent since December 2016.

“Declining interest rates have significantly increased millennials’ awareness of refinancing as a fiscally responsible option, and we’re seeing more and more homeowners in this demographic take advantage of refinancing their mortgages,” Ellie Mae CEO Joe Tyrrell said in the report. “Heading into 2020, lenders should proactively reach out to prospective millennial homebuyers whose likelihood of purchasing a home has now increased due to these historically low interest rates.”

With refinance activity on the rise, according to the millennial report, days to close a refinance loan increased across the board. Overall, days to close on all refinances jumped to 44 days in October, up two days month-over-month. This trend was consistent for all loan types, as days to close for conventional refinances (44), FHA refinances (51) and VA refinances (48) all increased in October.

Additional insights from the October Millennial Tracker include:

• Average days to close refinances increased in several key markets, including Los Angeles (42); Chicago (44); Austin, Texas (43); San Diego (41); Miami (48); San Francisco (43); and Dallas (41).
• The average age of the primary borrower on all closed loans was 30.6, tied for the highest mark of any month in 2019.
• The average FICO score on all closed loans reached 730, the highest average score of the year.
• Conventional loans accounted for 74 percent of all closed loans, compared with 21 percent for FHA loans, 2 percent for VA loans and 3 percent for other.