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Purchase activity among millennials increased in March, even as interest rates rose for the first time since October 2020, according to ICE Mortgage Technology Millennial Tracker. Interest rates increased to 2.98% from 2.88% in February, but purchase activity represented 51% of loans closed by millennials in March -- a notable increase from February’s 46% purchase share.
Joe Tyrrell, president of ICE Mortgage Technology said, “Although rates are increasing, they are still hovering at record-low levels and will likely continue to be favorable for millennials looking to purchase or refinance a home for a number of months to come.”
Though interest rates had been steadily decreasing since October 2020, when rates were at 3.03%, both younger millennials (those born between 1991 - 1999) and older millennials (those born between 1980 - 1990) experienced a slight rate increase in March. Rates for younger millennials increased, on average, from 2.85% in February to 2.96% in March, while rates for older millennials increased from 2.89% in February to 2.99% in March.
“As we enter the summer homebuying season, we are seeing a traditional increase in purchase activity; however, inventory remains extremely tight, so millennials may face steep competition when looking to make a purchase,” Tyrell added.
The average age of borrowers in the millennial generation remains relatively high at 32.7 in March, but slightly lower than 32.9 in February and January’s record high of 33. Additionally, the average time to close a loan for millennial borrowers also dipped to 48 days -- the first time this average has been below 50 days since October 2020. Also the average FICO scores for all millennial borrowers dropped to 739, down from 742 the month prior.
The ICE Mortgage Technology Millennial Tracker provides access to up-to-date demographic data about this new generation of homebuyers.The interactive online tool mines data from a sampling of approximately 80% of all closed mortgages dating back to 2014 initiated on ICE Mortgage Technology’s Encompass. Searches can be tailored by borrower geography, age, gender, marital status, FICO score and amortization type.
Click here to read more from the Millennial Tracker.