Millennial Homebuyers Complete Purchase Loans Despite Rising Interest Rates, Ellie Mae Millennial Tracker Finds
PLEASANTON, Calif.--(BUSINESS WIRE)--Nov 14, 2018--Millennial homebuyers continued to close purchase loans in September 2018, despite interest rates rising to the highest point in the year, according to the latest Ellie Mae Millennial Tracker™.
Interest rates on all loans rose to 4.87 percent in September, up from 4.86 percent the month prior, while conventional interest rates rose to 4.86 percent, up from 4.85 percent the month prior, and FHA interest rates rose to 4.94 percent, up from 4.93 percent in September.
Purchase loans continued to outpace refinance loans among Millennial borrowers. Eighty-nine percent of loan volume last month was for home purchases, three percentage points higher than a year ago. Eighty-eight percent of closed purchase loans were conventional mortgages, compared to 81 percent in September 2017.
Millennials still showed their preference for conventional loans with 68 percent of all loans falling into that category. 27 percent of closed loans were FHA and 2 percent were VA loans.
Across all home loans, it took an average of 42 days to close last month. A year ago, it took two days longer at 44 days to close. Purchase loans took an average of 41 days to close last month, compared to an average of 42 days to close a year ago. Refinance loans closed in 45 days last month, on average, compared to 46 days in 2017.
“Despite rising interest rates, Millennials are still looking to buy homes,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “We’re still seeing the majority of Millennial loans fall into the conventional loan category, and with interest rates increasing, there is an even greater opportunity for the industry to educate these buyers on all of the options that they have available to them, including some of the higher loan-to-value products and FHA loan programs.”
Additional findings from the September 2018 Ellie Mae Millennial Tracker include:Millennial males (both single and married) were listed as the primary borrower on 61 percent of closed loans in September. Women were listed on 32 percent and the remainder did not specify a gender. Ten percent of all home loans to Millennial borrowers were for refinances, while 11 percent of conventional loans were for refinances, both up one percentage point month-over-month for the quarter. Twenty-eight percent of closed VA loans in September 2018 were for refinances, a noticeable jump from 21 percent the month before. The average age of all Millennial borrowers was 29.7, essentially flat from 29.8 in July and August, and 29.4 a year ago.
Ellie Mae ® (NYSE: ELLI) is the leading cloud-based platform provider for the mortgage finance industry. The Ellie Mae Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. It mines data from a robust sampling of approximately 80 percent of all closed mortgages dating back to 2014 that were initiated on Ellie Mae’s Encompass ® all-in-one mortgage management solution. Given the size of this sample and Ellie Mae’s market share, it is a strong proxy of Millennial mortgage indicators across the country. Searches can be tailored by borrower geography, age, gender, marital status, FICO score and amortization type.
For more information, visit http://elliemae.com/millennial-tracker.
ABOUT THE ELLIE MAE MILLENNIAL TRACKER
The Ellie Mae Millennial Tracker focuses on Millennial mortgage applications during specific time periods. Ellie Mae defines Millennials as applicants born between the years 1980 and 1999. New data is updated on the first Monday of every month for two months prior. The Millennial Tracker is a subset of our Origination Insight Report, which details aggregated, anonymized data pulled from Ellie Mae’s Encompass origination platform. Additional information regarding the Origination Insight Report can be found at http://elliemae.com/resources/origination-insight-reports. News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.
ABOUT ELLIE MAE
Ellie Mae (NYSE:ELLI) is the leading cloud-based platform provider for the mortgage finance industry. Ellie Mae’s technology solutions enable lenders to originate more loans, reduce origination costs, and shorten the time to close, all while ensuring the highest levels of compliance, quality and efficiency. Visit EllieMae.com or call 877.355.4362 to learn more.
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CONTACT: Erica Harvill
Ellie Mae, Inc.
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA
INDUSTRY KEYWORD: TECHNOLOGY DATA MANAGEMENT SOFTWARE PROFESSIONAL SERVICES FINANCE CONSTRUCTION & PROPERTY RESIDENTIAL BUILDING & REAL ESTATE
SOURCE: Ellie Mae
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PUB: 11/14/2018 09:00 AM/DISC: 11/14/2018 09:01 AM