Average Mortgage Interest Rate Declines for Millennials while Loan Amounts Increase, According to August Ellie Mae Millennial Tracker™

Average FICO score holds steady at 749 for conventional loans and 691 for FHAs

PLEASANTON, Calif. – October 5, 2016 – As the Fed weighs increasing interest rates, average rates on home loans obtained by millennials fell to 3.763 percent in August, according to the latest Ellie Mae Millennial Tracker. This demonstrates a steady decrease from a high of 4.124 percent in February. At the same time, the average loan amount to millennial borrowers increased to $181,326, compared to July’s average of $180,413. The average loan amount for both conventional and FHA loans also increased, to $203,884 and $172,667, respectively.

The Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. Ellie Mae® (NYSE:ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry.

After increasing the past few months, the average FICO score for millennial borrowers remained stable at 725 in August. The percentage of millennial conventional loans in August continued to climb, resulting in 63 percent of total closed loans, up from 62 percent in July. Meanwhile, FHA loans continued to represent 35 percent of all closed loans in August, down from both June and May’s 37 percent share. The average debt-to-income ratio (DTI) rose to 24/36. Loan-to-value (LTV) increased to 88 in August.

“In August, millennial borrowers enjoyed the lowest average interest rates we have seen all year,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. “And we are seeing average loan amounts creep up for conventional and FHA loans as millennials take advantage of these low rates.”

MILLENNIAL TRACKER HIGHLIGHTS FOR AUGUST 2016
Loan Type Percentage of Loan Type Average Primary FICO Average Days to Close
Conventional 63% 749 45
FHA 35% 691 46

Unchanged since March, women were listed as the primary borrower on 32 percent of closed loans. Consistent with July data, among women who were listed as the primary borrower, 39 percent were married and 61 percent were single. Comparatively, among male primary borrowers, 59 percent were listed as married and 41 percent were single, a significant difference from women. The average age for borrowers remained consistent in 29.0 for female primary borrowers and 29.3 for male primary borrowers.

In August, female primary borrowers had an average FICO score of 725 and male primary borrowers had a slightly higher average score of 727. FHA loans represented 40 percent of total loans to female primary borrowers, compared to just 33 percent of male primary borrowers.

Owensboro, Ky. remained the top Metropolitan Statistical Area (MSA) for millennial borrowers, with 60 percent of its mortgage loans closed in August going to members of this generation. Dickinson, N.D. Dakota, Terre Haute, Ind., and Hutchinson, Minn. each had 47 percent of mortgage loans closed by millennial borrowers. When sorted by population, top MSAs included St. Louis, Mo.-Ill. (34 percent) followed by Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md. (32 percent).

The Ellie Mae Millennial Tracker 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.

The Ellie Mae Millennial Tracker is a supplement to Ellie Mae’s monthly Origination Insight Report, which focuses on loans that closed in a specific month and compares their characteristics to similar loans that closed three and six months earlier.

For more information on the Ellie Mae Millennial Tracker, 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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