Millennials Continue to be in High Purchasing Spirits
Ellie May reveals that the millennials have shown robust spirits in July, quite in line with their purchasing highs of May and June. Buoyed by sub-3% mortgage rates, millennials (those between 21 and 40) locked in 3.256% as the average 30-year rate. On the year-over-year chart, the rate stood at 4.186%, same time in 2019.
In terms of origination purpose for loans, their purchase column showed 61%, which is higher than 56% posted in June but a lot lesser than 76% on the year-over-year chart. Contrarily, refinancing’s 38% is lower than June’s 43% but higher than last July’s 23%.
Joe Tyrrell, chief operating officer at Ellie Mae, stated in a press release that “We’re seeing a new wave of younger millennial homebuyers flood the market as we enter peak home-buying season. With interest rates at historic lows, now is the perfect time for younger millennials to purchase a home and start building equity. To encourage homeownership among the millennial generation, especially younger millennials, it is imperative lenders educate these borrowers on all loan types, including affordable options with less stringent credit requirements such as FHA loans.”
While the average age of millennials jumping into real estate is relatively stable at 31.8%, compared to June’s 31.7%, it has shot up from last July’s 30.5%
With the pandemic drag, risk-averse lenders have resulted in an average millennial FICO score of 739, compared to last year’s 728 points. On breaking down millennials into two categories, that is 21 to 29 and 30 to 40, it is found that the share of the younger category has shot up by 81% in July compared to the elder group’s share that has risen by 53%.