Millennials Tap FHA to Enter Housing Market

The Millennial Generation–and in particular, female Millennials–see FHA as a gateway to homeownership.

Ellie Mae, Pleasanton, Calif., said 37 percent of Millennials used FHA in closed loans in May, compared to 23 percent of overall borrowers that month. The company also reported that women were listed as the primary borrower on one-third (32 percent) of all mortgage loans made to Millennials.

The Ellie Mae Millennial Tracker, an interactive online tool in Millennial loan trends in the U.S., also reported that of all female primary mortgage borrowers, 61 percent were single, with just 38 percent married. By contrast, when men were listed as the primary borrower, 58 percent reported being married and 41 percent said they were single.

“We are seeing a significant difference in marital status between male primary borrowers and female primary borrowers,” said Joe Tyrrell, executive vice president of corporate strategy with Ellie Mae.

And for those of you still asking if the Millennial Mortgage Bus has arrived yet–it has. Ellie Mae said in many U.S. markets, Millennials dominate home closings. Top Metropolitan Statistical Areas by percentage of millennial loans closed included Columbia, Mo., Jonesboro, Ark. and Sioux Falls, S.D., of which all saw 55 percent closed loans falling within the Millennial category. When sorted by population, top MSAs included Minneapolis/St. Paul, St. Louis and Baltimore.

In coastal markets, however, where FHA loans play a less significant role and home prices trend higher, Millennial closings drop substantially. In San Francisco, for example, just 17 percent of home purchases in May came from Millennial buyers.

The report said the average primary FICO score for female loan applicants was 723, down from 724 in March; the average age was 29.0, holding steady for the third consecutive month. The average FICO score for men remained steady at 724; the average age was 29.2.

Conventional loans represented 60 percent of total millennial closed loans in May, remaining steady from April. Loans took an average of 44 days to close, up from 43 days in April. The average FICO score for all closed millennial loans was 722, up slightly from 721 in April.