Millennials Overwhelmingly Seeking Purchase Loans Over Refinancing

Purchases made up 90 percent of all closed loans to Millennials in May, up from 89 percent in April, according to new data from Ellie Mae. Refinances represented only nine percent of Millennial mortgage origination in May, down from 10 percent in April, while the remaining one percent was attributed to unspecified activity.
 
Sixty-eight percent of loans sought out by Millennials in May were conventional loans, while FHA loans accounted for 28 percent of closed loans, VA loans represented two percent and the remaining three percent were undisclosed. Millennial males were listed as the primary borrower on 62 percent of closed loans, while females were listed on 32 percent and 7 percent were unspecified. For comparison, in May 2017, males were listed as the primary borrower on 65 percent of loans, females at 32 percent and three percent were unspecified. The average age of Millennial borrowers in May was 29.9, unchanged from the prior month.

 

Ellie Mae also noted that average Millennial borrower credit scores on closed loans varied widely by market during May, ranging from 662 in Madisonville, Ky., to 757 in San Francisco.
 
“You would expect to see higher average FICO scores in the largest coastal metropolitan cities where loan amounts are higher, which we do see in areas such as San Francisco (757), Los Angeles (745), Boston (701) and Miami (722); however, there are some surprisingly high numbers in more rural areas, such as Mitchell, S.D where the average FICO for Millennials was 735 in May, higher than Boston or Miami,” said Joe Tyrrell, Executive Vice President of Corporate Strategy for Ellie Mae. “Our Borrower Insights Survey recently found that many Millennials have a strong misperception about needing a perfect credit score to qualify for a home loan.”

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