Millennials rush to close mortgages as rates hit 10-month low

The average 30-year note dropped to 4.75% in March, down from 4.85% in February and the lowest rate since April 2018.

Ellie Mae’s Millennial Mortgage Tracker reveals that March also saw the average time for Millennial homebuyers to close their mortgage drop to 40 days from 42 days in February; marking the lowest number of days since February 2015.

“Homebuying tends to pick up in the spring and lower interest rates are intensifying this trend among Millennials,” said Joe Tyrrell, executive vice president of strategy and technology at Ellie Mae. “Likewise, lower interest rates are providing increased purchase power to Millennials, allowing them to participate in a very competitive home buying market.”

Interest rate decreases were led by conventional loans with a month-over-month drop from 4.81% to 4.7%, and VA loans, which fell from 4.47% to 4.36%. FHA loan average interest rates decreased from 4.85% to 4.84% during the same time period.

Conventional loans accounted for 68% of all loans originated for Millennials, 28% were FHA, 2% were VA and other loans accounted for 3%.

Among FHA loans, purchases increased to 95% in March, up from 89% the month prior. Among Conventional loans, share of purchases fell to 85%, down one percentage point from February.

Credit scores declined slightly
The average FICO score for Millennial borrowers on all closed loans in March was 720, down slightly from 723 in February.

Millennial males were listed as the primary borrower on 60 percent of closed loans in March. Millennial women were listed on 31 percent and the remainder of closed loans did not specify primary borrower gender.