Millennials took the opportunity to refinance their mortgages when interest rates dwindled in January. Their refinances were at their highest since February last year, accounting for 13% of all closed loans, according to the most recent Ellie Mae Millennial Tracker.
The January Ellie Mae Origination Insight Report, which analyzes trends among borrowers of all ages, also revealed that refinances increased to 35% of closed loans in January from 29% in December.
“With average interest rates slightly falling in January, millennials took advantage of refinance opportunities,” said Joe Tyrrell, executive vice president of strategy and technology at Ellie Mae. “While we continue to see millennials enter the housing market and exercise their purchase power, the uptick in refinances may indicate maturity among this generation who previously purchased a home and are looking for an opportunity to take advantage of lower monthly interest payments.”
Refinances also accounted for a larger share of each type of loan in January. Refinances for conventional loans for millennials climbed from 11% in December to 14%, while FHA refinances grew from 6% to 7% in January. VA refinances also moved up from 27% to 35% during that same period.
In January, the average millennial primary borrower refinancing their home was 33 years old and had a FICO score of 728. Two-thirds were married (66%) while one-third were single (33%), and 1% were unspecified. In addition, most primary borrowers who refinanced were male (63%).
The January 2019 Ellie Mae Millennial Tracker’s other key findings include:
- The share of conventional loans increased from 68% the month prior to 69% of all closed loans, while FHA loans remained at 27% from December.
- The average FICO score of millennial borrowers who closed on loans in January increased slightly from 721 to 722 in December.
- The top five markets for millennial borrowers in January included Warrensburg, Mo., Somerset, Pa., Ottumwa, Iowa, Minot, N.D., and Williston, N.D.