Industry should step up tech game as more millennials buy houses
An increase in millennials making home purchases is a call to the mortgage industry for a quicker, more efficient digital process.
Mortgages made to millennial borrowers for new-home purchases comprised 91% of closed loans in June, up from 81% at the start of the year and from 90% in May.
"As it remains a competitive, purchase-centric market, we will continue to keep a close eye on the purchase trends amongst millennials," Joe Tyrrell, Ellie Mae's executive vice president of corporate strategy, said in a press release.
"This new generation of homebuyers wants the capability of an on-demand mortgage, and we are working to provide borrowers a convenient and secure digital mortgage offering that makes the home buying process a seamless experience," he continued.
The millennial generation is the largest cohort buying homes and will continue to drive the housing demand curve upward throughout the year, according to Doug Duncan, Fannie Mae's chief economist. And because millennials are among the most tech-savvy, providing instantaneous, digital access to mortgage tools is particularly important for lenders approaching the generation.
Millennial closing times for purchase loans took an average of 41 days, while refinance loan closing times took an average of 45 days. Overall, it took the generation an average of 42 days to close their loans in June.
Average FICO scores for millennials ticked up to 723 from 721 in May, which had remained unchanged since March, though localized averages showed very different results by city.
The hottest housing markets for millennial borrowers in June were primarily in the Midwest.