Millennials were not deterred from purchasing homes in October, as the market continued to tighten with rising interest rates and average loan amounts decreasing, according to the latest Ellie Mae Millennial Tracker. The average loan amount to millennial borrowers for all closed loans was $189,686 in October, down from $192,005 in September, yet higher than last October’s average of $186,567.

When men were listed as the primary borrower, the average closed loan in October was $198,864, compared with a much lower $188,607 when women were the primary borrower.

Even with rising mortgage rates, purchase loans still accounted for 88 percent of closed loans to millennial borrowers in October, 4 percentage points higher than a year ago. Of all closed loans to this demographic, 68 percent were conventional loans, while 27 percent were for FHA loans, 2 percent were VA loans and 3 percent were undisclosed, according to the Ellie Mae Millennial Tracker.

“Although housing prices and interest rates are still rising at a faster pace in 2018 than they have in previous years, those trends are not yet stopping millennials from purchasing homes and putting down roots,” Joe Tyrell, executive vice president of corporate strategy for Ellie Mae, said in the report. “It is important for lenders to educate millennials on the value of FHA loans that bring lower down payments and can allow these new homebuyers to stretch their dollar a little further even with rising interest rates.”

Additional findings from the October 2018 Ellie Mae Millennial Tracker includes:

• Interest rates on all loans rose to 4.96 percent, the highest percentage point since Ellie Mae started tracking this data in 2016, up from 4.87 percent in September, and up from 4.13 percent a year ago.
• Refinances slowly began to rise in the fourth quarter, representing 11 percent of all home loans to millennial borrowers.
• Across all home loans, it took an average of 42 days to close last month. A year ago, it took one day longer at 43 days to close. Purchase loans took an average of 41 days to close last month, compared with an average of 42 days to close a year ago. Refinance loans closed in 48 days last month, on average, compared with 45 days in 2017.
• The average FICO score for millennial borrowers remained flat for the third consecutive month at 722, slightly down from 723 in July.
• The average age of all millennial borrowers remained flat at 29.7 from the previous month, and essentially flat from 29.3 in October 2017.
• Millennial males (both single and married) were listed as the primary borrower on 60 percent of closed loans in October. Women were listed on 32 percent and the remainder did not specify a gender.