Millennial borrowers closed loans in August with an average amount of $185,919, a slight increase from the $184,113 average loan amount in August last year. The change comes in spite of an increase in the average 30-year note rate to 4.211% from 3.706%.
“Average loan amounts in August of this year were slightly higher than last year, despite higher interest rates,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “As tends to happen with tight inventories, this is a seller’s market, and many of today’s homebuyers may be faced with paying a premium for the same home they might have bought for less last year. For those who are committed to buying a home, though, slight increases in competition, costs, or interest rates will likely not deter them.”
During the month, the average millennial primary borrower was 29.4 years old and took out a conventional loan to purchase home with an average appraised value of $223,882. FICO scores for millennial buyers averaged 724, while loans were closed in 44 days. A majority of these borrowers at 64% were male, and 52% of all borrowers were married.
The market share of conventional loans and FHA
mortgages have remained unchanged since June at 64% and 32% of all loans closed by millennials, respectively. Overall, borrowers from the generation were most likely to close loans to purchase a home (87%), while 12% of all millennial loans in August were refinances.
Affordability, competition issues pose roadblocks to millennial homeownership
Purchase mortgages remain strong among millennials
Despite higher rates, millennial borrowers took out mortgage loans at higher amounts than they did a year ago, according to data from the Millennial Tracker released by Ellie Mae.