Millennial mortgage activity remained strong at the end of the summer, according to Ellie Mae.
Mortgage applicants between the ages of 21 and 40 have set an average 30-year interest rate of 3.105% – a number that continues to drop to new record lows on Millennial Tracker. The rate fell from 3.256% in July and 4.059% in August 2019.
"With interest rates historically low, lenders are processing more loans than ever before," said Joe Tyrrell, president of ICE Mortgage Technology, in a press release.
With the increase in volume, the closing time increased to 47 days, two compared to July and five compared to August 2019.
Purchase credits made up the lion's share of originations, though that percentage fell from 61% in July to 59%, a sharp drop of 74% year over year. Refinancing accounted for about 40% of thousand-year loans in August, up from 38% in the previous month and significantly from 25% in the previous year.
The average millennial FICO score stood at 739 for the third straight month, up from 728 year-over-year when lenders cut loan availability to a six-year low. Credit scores for approved loans are likely to remain high amid the economic unease associated with coronavirus.
The median age for millennial borrowers increased from 31.7 years in July to 31.8 years, and increased from 30.5 years in August 2019.
The Federal Housing Administration and Veterans Department's conventional loan percentages were unchanged at 80%, 17% and 1%, respectively, month on month. Other unspecified types of funding made up the remaining 2%.
Married individuals accounted for 60% of loans completed, compared with 59% in July and 55% last year. Overall, about 57% of the main borrowers were male, 30% female, and 13% unspecified. The average loan amount rose again to $ 213,841, increasing from $ 211,264 monthly to $ 203,467 per year.
The dynamics change when the data is split between older borrowers (aged 30 to 40) and younger borrowers (aged 21 to 29).
The purchase share of the older group in August was 52% compared to 79% for the younger group. By loan type, conventional mortgages accounted for 83% for older millennials versus 71% for younger millennials, while FHA loans accounted for 13% and 25%, respectively. The average FICO scores for older millennials rose to 748, while the younger rate with less credit accumulation time hit 727.