Millennials Pick Up Refinancing Pace

Millennials–at least, the ones who already have mortgages–are refinancing.

Ellie Mae, Pleasanton, Calif., reported Millennials showed their home buying savvy over the past year. Refinances by Millennial borrowers accounted for 14 percent of all closed loans, the highest percentage since February, according to the latest Ellie Mae Millennial Tracker.

Additionally, refinances for conventional loans for Millennial borrowers rose to 17 percent, up from 15 percent in August, while FHA refinances rose from 4 percent to 5 percent in September. During that same time period, VA refinances rose to 30 percent, up from 28 percent the month prior.

But it’s not just Millennials who took advantage of lower rates in summer/early fall. The September Ellie Mae Origination Insight Report, which explores trends among borrowers of all ages, showed that refinances climbed to 38 percent of closed loans.

“With average interest rates falling to their lowest point in 2017, Millennials are taking advantage of refinance opportunities,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “While we are also seeing Millennials with more purchase power, the uptick in refinances indicates maturity among those Millennials who previously purchased a home and are looking for an opportunity to lower their monthly interest payments.”

Ellie Mae reported the average Millennial primary borrower refinancing their home was 31.5 years old, with a FICO score of 732. Two-thirds of those who refinanced were married. The majority of primary borrowers who refinanced were male.

Other key findings from September:

–The share of conventional loans increased to 65 percent of all closed loans, up from 64 percent in August, while FHA loans decreased to 31 percent, down from 32 percent in August.

–The average FICO score of Millennial borrowers who closed on loans in September decreased slightly to 723, down from 724 in August.

–Top five markets for Millennial borrowers in September were Cumberland, Md., Gillette, Wyo., Williston, N.D., Cadillac, Mich. and Fairmont, W. Va.