Millennials Drive Shorter Closing Times

If you offer it, They will close.

“They,” being tech-savvy Millennials, who are taking advantage of digital mortgage technology, said Ellie Mae, Pleasanton, Calif. The company’s monthly Millennial Tracker showed the time it took Millennials to close mortgage loans for new home purchases in March decreased to its fastest time yet, at 39 days, down from 41 days in February.

The report also Noted the average age of the Millennial homebuyer also slightly increased year-over-year to 30.1 in March, a slight jump from a year ago (29.5). Males were listed as the primary borrower on 63 percent of closed loans to Millennials, while women represented 32 percent (5 percent were unspecified). Married Millennials represented 52 percent of all closed loans, compared to 47 percent for singles.

“As more Millennials reach the prime home buying age of 29 to 32 years old, they are finding a mortgage experience leveraging technology that is fast and engaging in ways that their parents couldn’t imagine when they were buying their first home,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae.

The report said the share of conventional, FHA and VA purchase loans saw significant upticks in March, as Millennials continued to take advantage of various loan options to buy a home. Conventional purchase loans closed by Millennial borrowers rose to 85 percent in March, up from 80 percent the month prior. While the share of FHA purchase loans rose 2 percentage points to 96 percent month-over-month, VA purchase loans saw the most significant increase in March at 79 percent, up from 66 percent in February.

Other report findings:

–Average FICO score for Millennial borrowers fell to 721 in March, down from 724 in February. The average FICO score for female borrowers in March was 722. It was 723 for male borrowers.

–Average loan-to-value ratio for Millennial borrowers in March was 87, comparatively higher than the average for borrowers of all ages, which as outlined in the March Origination Insight Report was 79. Average Millennial borrower debt-to-income ratio was 25/38, while the average for borrowers overall came in at 26/39.

–Top markets by percentage of Millennial loans closed included Dyersburg, Tenn. (73 percent), Binghamton, N.Y. (70 percent), Fairmont, W.Va. (68 percent) and Mount Sterling, Ky. (63 percent).