According to ICE Mortgage Technology Millennial Tracker, the percentage of purchase activity to total closed loans among millennials has increased for the third consecutive month.
Out of the loans closed by millennials on Encompass, the ICE Mortgage Technology origination platform, 67% were purchase loans in May, up 61% from the prior month. Millennials born between 1991 and 1999 accounted for 82% of purchase loans closed, up from 78% in April. Older millennials born between 1980 and 1990, purchases accounted for 60% of all closed loans, up from 53% in April.
Joe Tyrrell, president of ICE Mortgage Technology, said, “Across the country, we’re seeing a strong and competitive purchase market, particularly among millennials. With FICO score requirements loosening, millennials are taking advantage of the current environment to continue to jump into homeownership.”
FICO scores for millennial borrowers continue to decline for the fourth consecutive month, with the average dipping to 732 in May. Average FICO score amongst millennials is down from 734 in April and 739 in March.
Purchase loans are also succeeding more on average than refinance loans amongst older millennials. Purchase share for older millennials was larger than refinance share for the second consecutive month in May, with 60% of loans being purchases and 38% being refinances.
Most millennials are around the age of 32 when they apply for their first purchase loan.
The average time it takes to close on a purchase loan for millennial borrowers is 46 days, down from 48 days in April. The days it takes to close a refinance loan decreased from 52 in April to 50 in May, while days to close a purchase loan held steady at 44 days.
For more information on millennial homebuying trends, visit icemortgagetechnology.com/millennial-tracker.
