Millennials Step Back (Slightly) From FHA Loans: Ellie Mae Millennial Tracker™
August 09 2017 - 9:00AM
Business Wire
The youngest generation to hit the homebuying market in force is
taking out fewer FHA-backed mortgage loans, according to June data
from the Ellie Mae Millennial Tracker™. Sixty-three percent of all
closed loans made to Millennial borrowers were conventional loans
for an average amount of $205,066. Thirty-two percent of closed
loans were FHA loans for an average amount of $173,381.
“Conventional and FHA loans make up the vast majority of loan
types among Millennials, and tend to track in cycles. The numbers
for June show us that, after a one-year high at 36 percent of all
closed loans in February and March, FHA loans have been steadily
decreasing for the past four months,” said Joe Tyrrell, executive
vice president of corporate strategy for Ellie Mae. “Conventional
loans are rising, from 60 percent in March to June’s 63 percent,
indicating that, at least at the moment, Millennials are slightly
more able to afford a house without government guarantees.
Alternatively, this also demonstrates a potential opportunity for
greater borrower education on FHA and other loan options
available.”
The San Jose-Sunnyvale-Santa Clara region of California’s Bay
Area topped the list of most expensive metropolitan statistical
areas (MSAs), with an average loan amount of $598,606. By
comparison, the average loan amount for the state of California as
a whole was $315,967. Average loan amounts for other major metro
areas include:
- San Francisco-Oakland-Hayward -
$543,851
- Los Angeles-Long Beach-Anaheim -
$436,967
- Boston-Cambridge-Newton, Mass./N.H. -
$364,767
- Washington, D.C.-Arlington-Alexandria -
$342,722
Other key findings from the June 2017 Ellie Mae Millennial
Tracker include:
- In June, 90 percent of all loans closed
by Millennials were for purchases, with just 10 percent for
refinances
- Among FHA loans, 96 percent were for
purchases and 4 percent were for refinances; Comparatively, for
conventional loans, 87 percent were for purchases and 12 percent
were for refinances
- Across the nation, single men, on
average, took out loans for $181,433, while single women averaged
$166,996
- Millennials continued to buy in the
affordable Midwest, with Muscatine, IA, (average loan amount:
$143,988) Watertown, S.D., ($138,492) Frankfort, Ind.,($125,069)
Oshkosh-Neenah, Wis., ($150,751) and Quincy Ill./Mo. ($107,589)
making up the top markets overall
- FHA refinance loans time-to-close took
a significant drop, moving to 45 days from 55 days in May
Ellie Mae® (NYSE:ELLI) is a leading provider of innovative
on-demand software solutions and services for the residential
mortgage industry.
The Ellie Mae Millennial Tracker is an interactive online tool
that provides access to up-to-date demographic data about this new
generation of homebuyers. It mines data from a robust sampling of
approximately 80 percent of all closed mortgages dating back to
2014 that were initiated on Ellie Mae’s Encompass® all-in-one
mortgage management solution. Given the size of this sample and
Ellie Mae’s market share, it is a strong proxy of Millennial
mortgage indicators across the country. Searches can be tailored by
borrower geography, age, gender, marital status, FICO score and
amortization type.
For more information, visit
http://elliemae.com/millennial-tracker
ABOUT THE ELLIE MAE MILLENNIAL TRACKER
The Ellie Mae Millennial Tracker focuses on Millennial mortgage
applications during specific time periods. Ellie Mae defines
Millennials as applicants born between the years 1980 and 1999. New
data is updated on the first Monday of every month for two months
prior.
The Millennial Tracker is a subset of our Origination Insight
Report, which details aggregated, anonymized data pulled from Ellie
Mae’s Encompass origination platform. Additional information
regarding the Origination Insight Report can be found at
http://elliemae.com/resources/origination-insight-reports. News
organizations have the right to reuse this data, provided that
Ellie Mae, Inc. is credited as the source.
ABOUT ELLIE MAE
Ellie Mae (NYSE:ELLI) is the leading cloud-based platform
provider for the mortgage finance industry. Ellie Mae’s technology
solutions enable lenders to originate more loans, reduce
origination costs, and shorten the time to close, all while
ensuring the highest levels of compliance, quality and efficiency.
Visit EllieMae.com or call (877) 355-4362 to learn more.
© 2017 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, the
Ellie Mae logo and other trademarks or service marks of Ellie Mae,
Inc. appearing herein are the property of Ellie Mae, Inc. or its
subsidiaries. All rights reserved. Other company and product names
may be trademarks or copyrights of their respective owners.
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Ellie Mae, Inc.Erica Harvill,
925-227-5913Erica.harvill@elliemae.comorAllison+PartnersAlexandra
Gardell Kreuter, 646-428-0618EllieMae@allisonpr.com
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