In housing markets dominated by young borrowers, millennials took an even bigger share of overall mortgage activity in August.
At 72%, Lima, Ohio, had the largest share of millennial mortgage borrowers in August, according to data from mortgage software developer Ellie Mae. A year ago, the top market for millennials was Dickinson, N.D., but the market share was only 61%. The year-over-year trend was similar in each of the top 10 housing markets dominated by millennials in August.
Top Millennial Housing Markets
|Lima, OH||72%||Dickinson, ND||61%|
|Batavia, NY||71%||Safford, AZ||58%|
|Dyersburg, TN||71%||Beaumont-Port Arthur, TX||56%|
|Roswell, NM||71%||Huntington, IN||56%|
|Kendallville, IN||69%||Terre Haute, IN||52%|
|Aberdeen, SD||65%||Laredo, TX||51%|
|Sayre, PA||64%||Kendallville, IN||50%|
|Williston, ND||58%||Decatur, IN||50%|
|Ottumwa, IA||57%||Texarkana, TX-AR||49%|
|Dickinson, ND||57%||McAllen-Edinburg-Mission, TX||48%|
In August, conventional loans for millennials remained steady at the end of the summer, and comprised 64% of all loans closed by the generation. FHA mortgages have held steady at 32% since June.
Despite the average 30-year note rate having increased about 0.5% from last year, the average loan amount for loans closed by millennial borrowers inched up to $185,919 in August. Millennials closed an average of $184,113 in loans during the same period last year.
"As tends to happen with tight inventories, this is a seller's market, and many of today's home buyers may be faced with paying a premium for the same home they might have bought for less last year," said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae, in a press release. "For those who are committed to buying a home, though, slight increases in competition, costs or interest rates will likely not deter them."
The average millennial primary borrower in August was 29.4 years old with a conventional loan amount of $185,919 to purchase a home with a $223,882 average appraised value. The average borrower had a 724 FICO score, helping to secure a 30-year note rate of 4.211%. At 64%, the majority of primary borrowers were male, closed their homes in about 44 days, and about 52% were married.
Female borrowers increased their purchase power, with closed loans averaging $189,574, up from $184,094 from last year.
Average millennial borrowers on the West Coast were slightly older at 30.6 years old, taking out an average loan amount of $314,579. In the Midwest, loan amounts were lower, with borrowers taking out an average loan amount of $158,584 in Kansas, for example. Comparatively, in Hawaii, borrowers aged 31.4 years took out loans amounting to about $396,766.
Overall, 87% of loans closed by millennials in August were for a home purchase, and 12% were for a loan refinance.