Credit scores on mortgages made to millennials drop
The average credit score of loans made to members of the millennial generation were a little lower than they were a year ago, according to Ellie Mae's latest monthly numbers.
"With the average credit score dipping, lenders are extending credit to borrowers who may have had no previous access to the housing market,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae, in a press release.
While on average millennials' scores have fallen, they are "still significantly above the levels seen a few years ago," Tyrrell said.
The average score for all closed loans to millennials in November of last year was 723, down from 725 in November 2016, according to Ellie Mae's Millennial Tracker survey.
But the trend is more pronounced for mortgages insured by the Federal Housing Administration.
The average score for FHA purchase loans made to millennials was 683 in November 2017, down from 690 in November 2016. During the same span of time, the average credit score for FHA refinance loans millennials took out slipped to 669 from 678.
The average credit score for millennial purchase loans insured by the Department of Veterans Affairs actually rose to 745 from 744 in the 12 months between November 2017 and November 2016. But the average credit score for millennial VA refinance loans fell to 710 from 725 during the same span of time. There is concern about excessive refinancing in the VA market.
The average credit score for conventional refi loans made to millennial borrowers also dropped significantly, falling to 741 in November 2017 from 751 in November 2016. During the same span of time, the average credit score of millennials' conventional purchase loans fell only slightly to 744 from 745.
Millennials are a sought-after demographic because they are the largest generation in the U.S. workforce, and they are less creditworthy than the previous generation.