An increasing percentage of millennials qualified for conventional loans during January, according to Ellie Mae latest Millennial Tracker.
The January tracker found 67 percent of all closed loans by millennial borrowers were conventional – the highest percentage in two years. Ellie Mae said conventional loans were the most popular loan product among millennials in January, but women were slightly more likely to use FHA loans.
“Historically we have seen millennials look to FHA programs to help address their home buying needs, but in the past two months, FHA loans have represented less than 30 percent of the total loans for millennials,” Ellie Mae Executive Vice President Joe Tyrrell said in a release. “We view this as an indication that more millennials are qualifying for conventional mortgages.”
During January, 81 percent of all closed loans to millennials were for purchases, down from 84 percent the month prior. Refinances accounted for 18 percent of all closed loans to millennials in January.
Ellie Mae found the average FICO score of millennial borrowers in January increased to 723, up slightly from 722 in December. It took millennial borrowers an average of 45 days to close loans, up from 43 days in December. The average time for women to close a loan was 44 days, compared to 45 days for men, Ellie Mae said.
The top metropolitan statistical areas (MSAs) for millennial women homebuyers in January were La Crosse-Onalaska, Wisc.-Minn., St. Cloud, Minn., and Green Bay. The top MSAs for millennial men were Fairmont, W. Va., Owensboro, Ky., and Macon, Ga.