Millennials continue to spur refinance boom

by Candyd Mendoza05 Nov 2020

The US housing market is still in the midst of a refinance boom, and millennials are not letting the opportunity slip. 

Figures from the Ellie Mae Millennial Tracker showed that refinances accounted for 43% of all closed loans in September, up 3% from the previous month. Conventional loans made up 51% of loans closed by millennials, up from 48% month over month.

The share of refis also increased for both sub-groups of this generation. Older millennials (between 30 and 40 years old) locked in slightly higher interest rates of 3%, compared to 2.98%% for younger millennials (between 21 and 29 years old).

Due to the challenges of tight inventory, the share of purchase loans closed by millennials fell for the second consecutive month, down from 59% of all closed loans in August to 56% in September.

"We have seen a steady increase in refinances among millennials over the past month, as homeowners took advantage of historically low-interest rates," said Joe Tyrrell, president of ICE Mortgage Technology. "However, the bulk of the millennial generation is still entering the market as first-time homebuyers, and they're swooping up the limited inventory that is available in most markets."

Conventional purchases decreased from 52% to 48% month over month. VA refinances held steady at 35%, and VA purchase loans remained unchanged at 65%. The same goes for FHA percentages, which have held steady for the past four months.