Photo: Robert Clark
US Millennials took advantage of September’s low interest rates to refinance their existing mortgages.
The share of refinances by Millennials grew two percentage points from the previous month to 14 percent in September, according to the Millennial Tracker released last week by Ellie Mae.
This was highest share since February, says the company, which is responsible for processing nearly a quarter of all US mortgages.
“With average interest rates falling to their lowest point in 2017, Millennials are taking advantage of refinance opportunities,” says Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae, in the report.
The share of Millennial conventional loan refinances increased from 15 percent in August to 17 percent in September. A conventional loan is one not guaranteed by a government agency.
Over the same period, FHA loan refinances among Millennials rose from 4 percent to 5 percent. An FHA loan is one that is insured by the Federal Housing Administration, and is generally used for low-income borrowers unable to make a large down payment.
The typical Millennial primary borrower that refinanced in September was 31.5 years old, with an average FICO score of 732. Additionally, two-thirds of those who refinanced were married, and most were male, according to Fannie Mae’s data.
The average FICO score of a Millennial homebuyer who closed on a mortgage in September was 723, down one point from the previous month.
September’s top five markets for Millennial borrowers were Cumberland, MD, Gillette, WY, Williston, ND, Cadillac, MI, and Fairmont, WV.
“While we are also seeing Millennials with more purchase power, the uptick in refinances indicates maturity among those Millennials who previously purchased a home and are looking for an opportunity to lower their monthly interest payments,” says Tyrell.
Click here to read the entire report.