Millennials Continue to Compete in Housing Market, According to April Ellie Mae Millennial Tracker

Percentage of Closed Loans for Millennials in Los Angeles, New York, Chicago and San Francisco Has Steadily Increased Over Last Three Years

PLEASANTON, Calif.--()--As the traditional home buying season kicked off, the seller held the upper-hand as low housing inventory drove competition among homebuyers, including Millennials. However, the competitive market did not deter Millennials, even in some of the most expensive markets, as the percentage of purchase loans among these borrowers steadily increased to 89 percent in April, up from 88 percent in March, according to the latest Ellie Mae Millennial Tracker. Closed refinance loans fell to 10 percent of all loans, down from 11 percent the month prior.

In April, the top metropolitan statistical areas (MSAs) where Millennials accounted for the majority of closed loans included Bardstown, Ky. (73 percent), Hobbs, N.M. (71 percent), Dalton, Ga. (65 percent), Victoria, Texas (63 percent) and Appleton, Wisc. (63 percent). Interestingly, while Millennials gravitate toward more affordable housing markets in the Midwest and Southeast, they are also continuing to settle down in more expensive markets in big cities. Over the last three years, the percentage of closed loans for homes near New York, Chicago, Los Angeles and San Francisco have increased.

“This new generation of homebuyers is making its presence felt across the country,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “Since the beginning of 2016, the percentage of Millennials purchasing homes in the Bay Area has actually increased from 16 percent to 20 percent.”

The major metropolitan areas are seeing healthy participation from Millennials, with the New York area seeing an increase from 19 percent in 2015 to 24 percent of homebuyers being Millennials in 2017. For areas such as Chicago and Dallas, the growth has been even more impressive with Chicago experiencing an increase from 22 percent to 31 percent and Dallas experiencing an increase from 21 percent to 31 percent over that same period of time.

“In this purchase centric market, we anticipate a continued rise in more creative lending products to help increase Millennials’ access to credit and continue to counter concerns that rising interest rates will stifle volume,” Tyrrell said.

Other key findings from the April data include:

  • Time to close loans to Millennial borrowers decreased in April, taking 42 days on average, down from 43 days in March
  • FHA loans remained popular with Millennials, comprising 35 percent of all closed loans in April, down from 36 percent the month prior
  • Both Conventional and FHA loans took an average of 42 days to close, on par with averages for March
  • The average FICO score for Millennial borrowers was 720 in April, holding steady from the month prior
  • Across all loans, both the average debt-to-income ratio (DTI) and loan-to-value (LTV) remained flat from the month prior, at 24/34 and 88, respectively

Ellie Mae® (NYSE:ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry.

The Ellie Mae Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. It mines data from a robust sampling of approximately 75 percent of all closed mortgages dating back to 2014 that were initiated on Ellie Mae’s Encompass® all-in-one mortgage management solution. Given the size of this sample and Ellie Mae’s market share, it is a strong proxy of Millennial mortgage indicators across the country. Searches can be tailored by borrower geography, age, gender, marital status, FICO score and amortization type.

For more information, visit http://elliemae.com/millennial-tracker

ABOUT THE ELLIE MAE MILLENNIAL TRACKER

The Ellie Mae Millennial Tracker focuses on Millennial mortgage applications during specific time periods. Ellie Mae defines Millennials as applicants born between the years 1980 and 1999. New data is updated on the first Monday of every month for two months prior.

The Millennial Tracker is a subset of our Origination Insight Report, which details aggregated, anonymized data pulled from Ellie Mae’s Encompass origination platform. Additional information regarding the Origination Insight Report can be found at http://elliemae.com/resources/origination-insight-reports. News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.

ABOUT ELLIE MAE

Ellie Mae (NYSE:ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. Mortgage lenders of all sizes use Ellie Mae’s Encompass® all-in-one mortgage management solution, Mavent Compliance Service, and AllRegs research, reference and education resources to improve compliance, loan quality and efficiency across the entire mortgage lifecycle. Visit EllieMae.com or call 877.355.4362 to learn more.

© 2017 Ellie Mae, Inc. Ellie Mae®Encompass®AllRegs®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

Contacts

Ellie Mae, Inc.
Erica Harvill, 925-227-5913
Erica.harvill@elliemae.com
or
Allison+Partners
Alexandra Gardell Kreuter, 646-428-0618
EllieMae@allisonpr.com

Contacts

Ellie Mae, Inc.
Erica Harvill, 925-227-5913
Erica.harvill@elliemae.com
or
Allison+Partners
Alexandra Gardell Kreuter, 646-428-0618
EllieMae@allisonpr.com