1-in-5 Closed Loans to Millennials were Refinances, According to Ellie Mae Millennial Tracker™

Loans to Millennial Borrowers Took Longer to Close in September

PLEASANTON, Calif. – November 3, 2016 – Refinances by millennial borrowers accounted for 20 percent of all closed loans in September, up from 17 percent of all closed loans in August, according to the latest Ellie Mae Millennial Tracker. Eighty percent of millennial loans were purchases, still accounting for the vast majority of closed loans by the demographic. Conversely, the September Ellie Mae Origination Insight Report data showed that 54 percent of closed loans were purchases and 45 percent were refinances.

Additionally, the time to close loans crept up in September, taking 47 days for all loans to millennial borrowers to close in September, on average, up from 46 days in August. Conventional loans took an average 46 days to close and FHA loans took an average of 47 days. These numbers are aligned with the overall time to close data in the September Origination Insight Report, which showed that the average time to close all loans increased to 48 days in September, up from 46 days in August.

Ellie Mae® (NYSE:ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry.

Other key findings from the September data include:

  • Conventional loans made up 64 percent of total closed loans to millennial borrowers in September, up from 63 percent the prior month
  • The share of FHA loans decreased to 33 percent of all closed loans, down from 35 percent in August
  • The average FICO score for millennial borrowers increased to 726 in September
  • The average rate on home loans continued declining to 3.728 percent in September
  • The total average loan amount increased to $184,179, up from an average of $181,326 in August
  • The average loan amount for conventional loans decreased slightly to $203,780, down from an average of $203,884 in August
  • The average FHA loan amount increased to $174,015, up from an average of $172,667 in August
  • Across all loans, the average debt-to-income ratio (DTI) remained stable at 24/36 while loan-to-value (LTV) decreased to 87, down from 88 in August

“As the average rate on home loans continues to decline, we are seeing millennials with more purchase power, indicated by the average loan amount increase. We’re also seeing a slight uptick in the number of refinances in September, indicating maturity among those millennials who previously purchased a home and are looking for an opportunity to lower the cost on their existing mortgage,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae.

The Ellie Mae Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. It mines data from a robust sampling of approximately 75 percent of all closed mortgages dating back to 2014 that were initiated on Ellie Mae’s Encompass® all-in-one mortgage management solution. Given the size of this sample and Ellie Mae’s market share, it is a strong proxy of millennial mortgage indicators across the country. Searches can be tailored by borrower geography, age, gender, marital status, FICO score and amortization type.

For more information, visit http://elliemae.com/millennial-tracker

About the Ellie Mae Millennial Tracker

The Ellie Mae Millennial Tracker focuses on millennial mortgage applications during specific time periods. Ellie Mae defines millennials as applicants born between the years 1980 and 1999. New data is updated on the first Monday of every month for two months prior.

The Millennial Tracker is a subset of our Origination Insight Report, which details aggregated, anonymized data pulled from Ellie Mae’s Encompass origination platform. Additional information regarding the Origination Insight Report can be found at http://elliemae.com/resources/origination-insight-reports. News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.

About Ellie Mae

Ellie Mae (NYSE:ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. Mortgage lenders of all sizes use Ellie Mae’s Encompass® all-in-one mortgage management solution, Mavent Compliance Service, and AllRegs research, reference and education resources to improve compliance, loan quality and efficiency across the entire mortgage lifecycle. Visit EllieMae.com or call (877) 355-4362 to learn more.

PRESS CONTACT

Erica Harvill
Ellie Mae, Inc.
(925) 227-5913
Erica.harvill@elliemae.com

Alexandra Gardell Kreuter
Allison+Partners
(646) 428-0618
EllieMae@allisonpr.com

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