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ICE Mortgage Technology's Millennial Tracker reported that refinance activity increased sharply for Millennial borrowers in February 2021. Data showed that refinances closed during this period accounted for 54% of all loans to members of the generation, up from 46% the month prior, according to the tracker. This brought refinance share to a level not seen since April 2020 during the peak of the pandemic refinance surge, when it hit 55%.
Additionally, ICE Mortgage Technology notes that younger millennials (born between 1991 and 1999) closed a record-high share of refinances for the month. Younger millennials have also typically closed more purchase loans than refinances as many are entering the housing market for the first time. However, in February, refinances accounted for 32% of loans closed by younger millennials – a significant jump since ICE Mortgage Technology began tracking the age groups separately in January 2020.
Meanwhile, older millennials (born between 1980 and 1990) continued to be the driving force behind the refinance surge as 61% of all loans closed by this age group were refinances.
“As we’ve seen with February’s refinance share increase, loan activity can change drastically from month to month, making it critical for lenders to set themselves up for success by adopting digital solutions early,” said Joe Tyrrell, president of ICE Mortgage Technology. “As we emerge from the pandemic, many borrowers will still want to complete the mortgage process as virtually as possible. Lenders can meet this demand by adopting new digital solutions early, like eClosing technology, that put them closer to a fully end-to-end digital mortgage process.”
Average interest rates for all age groups changed little month over month at 2.88%, according to the tracker. Younger millennials continued to secure marginally lower rates than their older counterparts, however, average interest rates for this age group increased to 2.85% while average interest rates for older millennials stayed the same at 2.89%. Also, the average age of millennial homebuyers also came in at 32.9, near January’s record high of 33.
Click here to view the full Millennial Tracker report.