Refinances represented 33 percent of all loans closed by millennials in September 2019, which Ellie Mae said was the highest share of millennial refinance activity since it began tracking the data nearly three years ago.
According to Ellie Mae’s Millennial Tracker, the share of refinances among this demographic group In September jumped 8 percent month-over-month as the average interest rate on all 30-year notes fell to 3.91 percent. Meanwhile, the share of purchase loans by millennials decreased from 74 percent to 66 percent in September.
“Throughout 2019, we’ve seen millennials refinancing in order to take advantage of low interest rates, and in September about one out of every three loans closed by this demographic was a home refinance, the highest share we’ve seen since we launched the Millennial Tracker in January 2016,” Ellie Mae Chief Operating Officer Joe Tyrrell said in a release.
“Lenders have done a great job educating millennials on recognizing refinance opportunities and as a result, this demographic has been able to lock in historically low rates,” Tyrrell said. “Going forward, we’ll be keeping a close eye on how these rates impact millennials looking to make a home purchase as well.”
Ellie Mae said the average FICO score for millennial borrowers in September was 729, and the average time to close for all loans remained flat at 42 days.
The share of refinances in key metro areas increased significantly in September, including in Los Angeles (51 percent to 57 percent); Chicago (29 percent to 41 percent); Austin, Texas (19 percent to 29 percent); San Francisco (50 percent to 55 percent); and Dallas (19 percent to 26 percent).