The share of millennials who refinanced mortgage loans edged up month over month in October, surpassing September’s record high.
The latest Ellie Mae Millennial Tracker revealed that refinances for millennials grew 1% month over month to 34% of all closed loans, hitting their highest level since January 2016.
The average interest rate on all 30-year loans fell to 3.9% from 3.91%, driving the increase in refinance share in October.
Refinances accounted for 41% of conventional loans closed by millennials, up from 40% in September. Meanwhile, refi share for FHA loans remained flat at 10% and refinance share for VA loans dropped six percentage points from the previous month to 42%.
“Declining interest rates have significantly increased millennials’ awareness of refinancing as a fiscally responsible option, and we’re seeing more and more homeowners in this demographic take advantage of refinancing their mortgages,” said Ellie Mae Chief Operating Officer Joe Tyrrell. “Heading into 2020, lenders should proactively reach out to prospective millennial homebuyers whose likelihood of purchasing a home has now increased due to these historically low-interest rates.”
The average age of the primary borrower on all closed loans was 30.6, tied for the highest average age of any month in 2019.
For all closed loans, the average FICO score was 730, the highest average score of the year.
Conventional loans made up 74% of all closed loans, compared to 21% for FHA loans, 2% for VA loans, and 3% for others.