ICE Mortgage Technology’s most recent Millennial Tracker report shows that the percentage of purchase activity leading to closed loans among millennials increased for the third consecutive month.
In May, 67% of loans closed by millennials on the Encompass by ICE Mortgage Technology origination platform were for purchases, up from 61% in April 2021 and 51% in March 2021. Purchases accounted for 82% of loans closed by younger millennials (born between 1991 and 1999), up from 78% in April. For older millennials (millennials born between 1980 and 1990) purchases accounted for 60% of all closed loans, up from 53% in April.
Average FICO scores for millennial borrowers decreased for the fourth consecutive month. In May, average FICO scores for borrowers of this generation dipped to 732, down from 734 in April and 739 in March.
“Across the country, we’re seeing a strong and competitive purchase market, particularly among millennials,” says Joe Tyrrell, president of ICE Mortgage Technology. “With FICO score requirements loosening, millennials are taking advantage of the current environment to continue to jump into homeownership.”
May was also the second consecutive month in which purchase share for older millennials was larger than refinance share. In May, 60% of loans closed by older millennials were purchases while 38% were refinances. Older millennials have not closed more purchases than refinances since August 2020, when purchases by the cohort accounted for 52% of closed loans.
The average age of millennial borrowers continues to hover around 32 years. In May, the average borrower age was unchanged from April’s average of 32.4 years old.
Average days to close a loan for all millennial borrowers decreased to 46, down from 48 in April. Days to close a refinance loan decreased month-over-month from 52 in April to 50 in May, while days to close a purchase loan held steady at 44 days.