Millennial homeowners ramp up the refis

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Millennials took advantage of mortgage rates falling to near three-year lows in August, increasing their refinance share to the highest percentage since December 2015, according to Ellie Mae.

The average 30-year rate fell to 4.06% in August, marking a low not seen since December 2016. As a result, the share of millennial refis jumped to 25% from 9% a year ago and 23% in July.

"We are seeing millennial homeowners who may have purchased homes only a few years ago quickly taking advantage of the industry’s extremely low interest rates," Joe Tyrrell, chief operating officer at Ellie Mae, said in a press release. "We will also be watching to see if the increased purchase power from a lower rate environment enables some millennials to make the leap into homeownership as we enter the fall home buying season."

The time to close a loan held steady at 41 days from the year prior, but was bumped up by a day from July. About 73% of mortgages completed in August were conventional and 22% were Federal Housing Administration loans. U.S. Department of Veterans Affairs accounted for 2%, while other unspecified loans occupied the remaining 3% of closed mortgages.

The average millennial FICO score remained at 728 from last month — the highest average since May 2015 — up from 724 a year ago. Millennial borrowers' average age, at 30.5 years, remained unchanged compared to July but was up from 29.8 in August 2018. Married individuals represented approximately 55% of loans closed, while about 44% of primary borrowers were single. Nearly 59% were male, 30% female and 10% unspecified.

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Refinance Purchase First time home buyers Housing market Mortgage rates Ellie Mae FICO FHA The VA