As summer and the traditional home buying season began to wind down, the percentage of millennial conventional loans increased slightly from 61 percent in June to 62 percent of total closed loans in July according to the latest Ellie Mae Millennial Tracker. Federal Housing Administration loans decreased as a percentage of overall loans, accounting for 35 percent of all closed loans in July, compared with 37 percent in June and May.
The average FICO score for millennial borrowers in July was 725, compared with 724 in June and 722 in May, driven by the slight shift to conventional loan products. The Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers.
Average note rates saw a substantial decline in July, dropping to 3.07 percent from 3.22 percent in June. Average debt-to-income ratio (DTI) stayed consistent from June to July with average DTI of 23/36 and loan to value (LTV) decreased slightly from 88 in June to 87 in July.
“As the percentage of conventional loans increases, we see a corresponding uptick in the average FICO scores,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae, in a press release. “The percentage of conventional loans has increased for the past two months, from May with 60 percent of all closed loans being conventional, to July which was at 62 percent. During that same time period the average FICO score increased from 722 in May to 725 in July. However, FHA loans remained a popular loan option among millennial borrowers with FHA loans representing 35 percent of closed loans for millennials while amongst the entire age population they represented 23 percent.”
Unchanged since March, women were listed as the primary borrower on 32 percent of closed loans. Among women who were listed as the primary borrower, 39 percent were married and 61 percent were single.
Consistent with June data, among male primary borrowers, 58 percent were listed as married and 42 percent single, a significant difference from women. Additionally, the average age for borrowers held steady from the month prior, resulting in 29 for female primary borrowers and 29.3 for male primary borrowers.
Metropolitan Statistical Areas (MSAs) where millennials accounted for at least half of mortgage loans closed included Owensboro, Ky. (62 percent);Midland, Mich. (58 percent); Chillicothe, Ohio (54 percent); Hutchinson, Minn. (52 percent); and Waterloo-Cedar Falls, Iowa (50 percent).