More millennials choosing conventional loans

by Ryan Smith12 Sep 2016
Millennials are starting to choose conventional loans over FHA-backed loans, according to a report in HousingWire.

The percentage of conventional loans among millennials is on the upswing, rising from 61% in June to 62% in July, HousingWire reported, citing data from Ellie Mae’s Millennial Tracker. FHA loans among millennials dropped, from 37% of total loans in June to 35% in July.

The shift to conventional loans also signals a continuing improvement in millennials’ credit ratings. The average millennial FICO score rose one point in July to 725. The average FICO score for millennials using conventional loan products was 749, while the average for those using FHA products was 691, HousingWire reported.

“As the percentage of conventional loans increases, we see a corresponding uptick in the average FICO score,” said Joe Tyrell, executive vice president of corporate strategy for Ellie Mae. “The percentage of conventional loans has increased for the past two months, from May with 60% of all closed loans being conventional, to July which was at 62%. During that same time period the average FICO score increased from 722 in May to 725 in July.”
 

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