Millennials Seek Affordable Areas to Buy Homes

You’re not going to find a lot of Millennials buying homes in housing hotspots such as Seattle, San Francisco or Denver. Instead think: Bay City, Mich.; Cheyenne, Wyo.; and Aberdeen, S.D.

Ellie Mae, Pleasanton, Calif., said its monthly Millennial Tracker report shows younger Americans have started purchasing more homes–just not necessarily in high-cost areas.

“Millennials are purchasing more homes than any other generation, and we’re seeing many single borrowers take advantage of opportunities now rather than waiting to purchase a home around a big life event such as getting married or starting a family,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “We’re also seeing Millennials get more for their money by purchasing homes in affordable markets.”

The report said in July, Bay City, Cheyenne and Norwalk, Ohio top the list of markets in which single Millennial homebuyers were more likely to close a mortgage loan in July than married homebuyers. For married Millennials, top markets were Aberdeen, Indiana, Pa. and Odessa, Texas.

The report said more than half of single Millennial homebuyers last month were men (53 percent), compared to 40 percent who were women; the remaining 7 percent were unspecified. Single homebuyers borrowed $172,904, on average, and had an average FICO score of 720. Sixty-seven percent of married Millennial primary borrowers last month were men, compared to 25 percent who were women; the remaining eight percent were unspecified. Married homebuyers borrowed $277,651, on average, and had an average FICO score of 729.

Additional report findings for July:

–Purchases made up 90 percent of all closed loans to Millennials, slightly down from 91 percent in June. Eight percent of home loans were for refinances, holding steady from the month prior, while 2 percent were unspecified.

–Conventional loans remained the most popular among Millennial borrowers at 68 percent of total closed loans in July. FHA loans accounted for 27 percent of closed loans. VA loans were just two percent of all closed loans. The remaining 3 percent were undisclosed.

–Millennial males (both single and married) were listed as the primary borrower on 61 percent of closed loans in July, while females were listed on 32 percent and 7 percent were unspecified. By comparison, a year ago males were listed as the primary borrower on 64 percent of closed loans, females were listed on 33 percent and 3 percent were unspecified.

–The average age of all Millennial borrowers was 29.8, essentially flat from 29.9 in June.