Despite interest rates reaching the highest point of the year, millennials continued to close purchase loans during September, according to Ellie Mae’s latest Millennial Tracker.
During September, interest rates on all loans rose to 4.87 percent, up from 4.86 percent in August. Conventional interest rates rose to 4.86 percent, up from 4.85 percent in August, and FHA interest rates rose to 4.94 percent, up from 4.93 percent.
“Despite rising interest rates, millennials are still looking to buy homes,” Ellie Mae Executive Vice President of Corporate Strategy Joe Tyrrell said in a release. “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.”
Ellie Mae said 89 percent of loan volume In September was for home purchases, 3 percent higher than a year ago. Eighty-eight percent of closed purchase loans were conventional mortgages, compared with 81 percent in September 2017.
Sixty-eight percent of all loans for millennials in September were conventional loans, 27 percent were FHA and 2 percent were VA loans, according to the tracker.
It took an average of 42 days to close loans in September, two days shorter than one year ago. The average age of all millennial borrowers in September was 29.7.