When it came to their mortgages in the last quarter of 2017, a bevy of millennials jumped on the refi bandwagon. As a result, refinances reclaimed their popularity in December, Ellie Mae [1] reports in its latest Millennial Tracker [2].
December was the third straight month in which refinances made up 15 percent of all closed loans for millennial borrowers, the report says. That’s the highest percentage of refis recorded for this group since February 2017’s yearly high of 17 percent. The percentage of closed purchase loans hovered at 84 percent, the report notes, dropping from the 90 percent peak posted in June 2017.
As for conventional refinanced mortgages, those have been chugging along at 19 percent since October, the report says. FHA refi loans, on the other hand, remained at 6 percent from the previous month. Added together, the percentage of conventional and FHA purchase loans also stayed the same from November to December, coming in at 80 and 94 percent, respectively.
Joe Tyrrell, Ellie Mae’s EVP of Corporate Strategy, sounded off on the potential motivations underlying the numbers.
“With seasonality and low inventory levels at the end of the year, millennial borrowers continued to take advantage of refinance options during the fourth quarter,” he said. “Many may have been driven by a desire to take advantage of low interest rates given uncertainty about potential rate hikes in the new year.”
Some other noteworthy nuggets:
- The average 30-year note inched up a tad from 4.18 in November to 4.22 in December—still below 2017’s highest monthly average of 4.34 in April.
- The average time to close all loans persisted at 44 days in December.
- Average time to close a refi camped out at 45 days, while the time to close a purchase also remained at 42 days, the same since June 2017.
- Average FICO scores for all closed loans slipped one point from the preceding month to 722.
The top Metropolitan Statistical Areas (MSAs) for millennials by percentage of mortgage loans closed in December were Casper, Wyoming (71 percent); Williston, North Dakota (63 percent); and Victoria, Texas, and Mount Pleasant, Michigan (both at 61 percent).