During the month of October, millennials faced higher interest rates and lower loan amounts, according to the latest Ellie Mae Millennial Tracker.
According to the tracker, the average loan amount to millennial borrowers for all closed loans in October was $189,686, down from $192,005 in September, yet higher than last October’s average of $186,567.
Ellie Mae said the average closed loan in October when men were listed as the primary borrower was $198,864, compared with $188,607 when women were the primary borrower.
“Although housing prices and interest rates are still rising at a faster pace in 2018 than they have in previous years, those trends are not yet stopping millennials from purchasing homes and putting down roots,” Ellie Mae Executive Vice President of Corporate Strategy Joe Tyrell said in a release. “It is important for lenders to educate millennials on the value of FHA loans that bring lower downpayments and can allow these new homebuyers to stretch their dollar a little further even with rising interest rates.”
Purchase loans accounted for 88 percent of closed loans to millennial borrowers in October, 4 percentage points higher than a year ago. Of all closed loans to millennials, 68 percent were conventional loans, 27 percent were for FHA loans, 2 percent were VA loans and 3 percent were undisclosed, the tracker found.
Interest rates on all loans to millennials in October rose to 4.96 percent, up from 4.87 percent in September, and up from 4.13 percent a year ago, Ellie Mae said. On average, it took 42 days to close loans during October, one day longer than one year ago.