About 89% of mortgage loans made to millennial borrowers during the month of April were for new home purchases, up one percentage point from March to reach the highest percentage since May 2017, according to the latest Millennial Tracker report from Ellie Mae.
The increase came despite rising interest rates and limited inventory.
Still, rising interest rates had some impact on the average amount that a millennial could borrow: The average loan amount to a millennial borrower in April fell to $188,171, down from $192,055 in March and down from $194,300 in February.
“Most Millennials are buying a house because there are major changes happening in their lives such as starting a family, getting a new job, or because they’ve decided that they want to build equity and stop renting,” says Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae, in a statement. “We believe millennial home purchases will continue to climb this summer and while interest rates may slightly impact the size of homes borrowers can get for their money, we don’t foresee it impacting their desire to buy.”
Overall, conventional loans represented 67% of all closed loans to Millennial borrowers, while FHA loans held steady at 29% from the previous month. Veterans Affairs purchase loans for millennial borrowers represented 79% of all VA closed loans in April, steady from the month prior, and up from 66% in February.
The time it took for millennial homebuyers to close a loan remained flat month-over-month. Purchase loans took an average of 39 days to close and refinance loans took an average of 44 days. FHA purchase loans took an average of 40 days to close, compared to 41 days in March. VA purchase loans averaged 49 days-to-close, compared to 45 days the month prior.
About 62% of closed loans to millennials had a male listed as the primary borrower, while 32% had a female listed as the primary borrower. About 6% were unspecified. In April 2017, 65% of closed loans had a male listed as the primary borrower; about 32% had a female as the primary borrower; and about 3% were unspecified.
The average age of millennial borrowers in April was 29.9, down slightly from 30.1 in March.
The average FICO score for a millennial borrower held steady at 721 – flat compared with March but down from 724 in February.
The hottest housing markets for Millennials continued to be in the Midwest. The top markets by percentage of millennial loans closed included Clarksburg. W. Va. (84%), Effingham, Ill. (82%), and Boone, Iowa (79%).