Millennial homebuyers are taking out larger FHA-backed mortgage loans year-over-year, according to November data from the Ellie Mae Millennial Tracker:
- 26 percent of all closed loans to millennials were for FHA loans. They had an average loan size of $186,454, up from $178,862 year-to-year and $170,167 in two years.
- Conventional loans accounted for 69 percent of closed loans made to millennials during the same period, with an average loan amount of $211,268.
- 2 percent of loans were for VA loans; three percent were unspecified.
FHA loans were more likely to be used to purchase a home (95 percent) – just five percent were for a refinance. Among conventional loans, 88 percent were for purchases and 11 percent for refinances.
“November data from the Millennial Tracker shows that millennial borrowers are taking out larger FHA mortgages and spending more on a home than in the past,” says Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “We are seeing that as inventory remains relatively slim, borrowers are not waiting to buy an affordable home and are instead increasing their loan amount to purchase what is available on the market.”
- Men were listed as the primary borrower for 56 percent of FHA loans. Women were listed on 35 percent, and nine percent were unspecified.
- It took an average 43 days to close both FHA and conventional loans across the country compared to an average of 42 days for all loans.
- In November, 89 percent of all loans closed by millennials were for purchases, 10 percent for refinances.
- Interest rates on all loans rose to 5.1 percent, the highest percentage point since Ellie Mae started tracking this data in 2016. That’s up from 4.96 percent in October and 4.17 percent a year ago.
- The average FHA loan borrower FICO score was 680 and the average score for those who opted for conventional loans was 744.
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