Millennial homebuyers took advantage of a winter lull in interest rates, using the opportunity to refinance their loans, according to Ellie Mae's Millennial Tracker.
Refinance mortgages occupied 13% of all millennial originations in January, a decrease from 18% year-over-year and a jump of 3 percentage points from December. It also marks the highest share
Purchase loans accounted for 85% of all millennials' closed loans, a 4 percentage point increase from the year prior and an edge down from December's 88%.
"With average interest rates slightly falling in January, millennials took advantage of refinance opportunities," Joe Tyrell, executive vice president of corporate strategy for Ellie Mae, said in a press release. "While we continue to see millennials enter the housing market and exercise their purchase power, the uptick in refinances may indicate maturity among this generation who previously purchased a home and are looking for an opportunity to take advantage of lower monthly interest payments."
Conventional mortgages took up 69% of millennials' closed loans for January — an annual growth of 2 percentage points. Federal Housing Administration loans fell 1 percentage point year-over-year, accounting for 27%. Veterans Affairs loans stayed static at 2% of closed mortgages and unspecified loan types went down to 2%.
The average FICO score of millennial borrowers was 722 in January, a slight drop from 723 a year earlier, but a bump from December's 721.
The average loan amount in January was $196,140, up year-over-year from $189,849 and month-over-month from $193,624. The gender discrepancy tilted 60% male to 31% female with 9% unspecified. Overall, 52% of the primary borrowers were listed as married compared to 48% being single.
