Millennials’ Preference for Conventional Loans at Four-Year High
October 3, 2018
Millennials overwhelmingly relied on conventional mortgages for their homebuying needs in August, according to new data from Ellie Mae.
During the month of August, 69 percent of all loans taken out by Millennials were conventional loans, the highest percentage recorded by Ellie Mae since February 2015. This level was up from 64 percent in August 2017. Among the other loan products, FHA loans represented 27 percent of all closed loans, down from 32 percent the year prior, while VA loans accounted for two percent, the same level as one year ago.
Ellie Mae also determined that 89 of closed conventional loans to Millennial borrowers were for purchases, up from 84 percent in August 2017. Purchases represented 90 percent of closed loans to Millennials in August, compared to 87 percent one year earlier. The average Millennial FICO score was 722, down slightly from 723 in July and 724 in August 2017, while the average age of all Millennial borrowers held steady at 29.8, down very slightly from 29.4 percent in the previous 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 homebuying generation,” said Joe Tyrrell, Executive Vice President of Corporate Strategy for Ellie Mae.
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