Rise in mortgage rates didn't halt millennial home buying
Purchase loans made to millennial mortgage borrowers rose month-over-month in February despite interest rates increasing at the start of the year, according to Ellie Mae's Millennial Tracker.
About 83% of loans made to millennials in February were for the purchase of a home, an increase of two percentage points from the previous month but down three percentage points from the same time a year ago.
Interest rates reached 4.399% in February, their highest recorded level since June 2014 and an increase from 4.248% in January.
"Despite rising interest rates, we're continuing to see millennials exercise their purchase power across the United States as they represent 45% of total closed purchase loans in February," Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae, said in a press release.
"And with the spring home buying season now underway, we'll see if the activity increases for this growing group of homebuyers," he added.
Millennial homebuyers also experienced shorter loan closing periods in February, with the time to close Federal Housing Administration and U.S. Department of Veterans Affairs loans in particular falling significantly.
The time to close FHA loans dropped to 44 days from 55 in January and from 54 at the end of 2017. Closing times for VA loans fell to 42 days from 57 in December and from 51 in January.
For male millennial borrowers, the average loan amount was $199,352 in February, and for female millennial borrowers, the average loan amount was $189,084.
The average FICO score for millennials remained unchanged since last June at 724. The top markets for the generation are situated in the Midwest.
Millennials now make up the nation's largest group of homebuyers.