PLEASANTON, Calif.,
Oct. 7, 2020 /PRNewswire/ -- The
average interest rates on all 30-year notes dipped to 3.11% in
August – the lowest since Ellie Mae began tracking this data –
spurring a surge in refinances for millennial homeowners, according
to the latest Ellie Mae Millennial Tracker. Refinances climbed to
40% of all closed loans for millennials in August, up 2% from the
previous month. Tight inventory across markets also led to
purchases dipping for the month, accounting for 59% of all closed
loans. This was a stark contrast to August
2019, when purchases accounted for 74% of closed loans and
the average 30-year note was 4.06%.
Refinances accounted for 48% of Conventional loans in August, up
from 46% the month prior, and up from only 29% of closed
Conventional loans in August of 2019. Conventional purchase loans
shrunk to 52% for the month, down from 53% in July. VA refinances
rose to 35% in August, a steady month-over-month increase from 31%.
VA purchase loans fell from 69% to 65% during this same time
period.
Meanwhile, FHA percentages have held steady for the past three
months.
Time-to-close for all loans increased to 47 days in August,
compared to 45 in July, and 42 days in August 2019. Given the increase in refinances,
the time-to-close on refinance loans also increased by one day,
month-over-month, to 53 days in August. That was 11 days longer
than the comparable timeframe last year. Purchase loans also
increased by one day year-over-year to 42.
"Given the historically low interest rates, lenders are handling
more loans now than they ever have before and they need tools to
streamline and automate the process," said Joe Tyrrell, President, ICE Mortgage Technology.
"The Ellie Mae Digital Lending Platform offers loan production and
closing solutions that allow retail and wholesale lenders to
seamlessly manufacture loans and collaborate with key parties
during closing. They can seamlessly process the influx of loans
they're facing and focus on building better relationships with
borrowers."
ICE Mortgage Technology, part of Intercontinental Exchange, Inc.
(NYSE: ICE) is made up of the innovation and expertise of Ellie
Mae, Simplifile and MERS. It is the only player who can truly
automate the entire mortgage process from point of homebuyer
interest to application to closing, post-closing and recording, to
the data that powers smart decision making. By offering a single
platform to connect the technology and innovation with the largest
network, ICE Mortgage Technology has the power to touch any
mortgage.
The Ellie Mae Millennial Tracker offers insights into two groups
of millennial homebuyers: older millennials between 30 and 40 years
old, and younger millennials between 21 and 29 years old.
In August, older millennials locked in slightly higher interest
rates of 3.105%, on average, compared to 3.087% for younger
millennials. With both sub-groups seeing historically low interest
rates, the share of refinance loans increased for both sub-groups
of millennials.
Ellie Mae Millennial Tracker – Older Millennials vs. Younger
Millennials
|
Older
Millennials
|
Younger
Millennials
|
Closed Loans
(Share) — All
|
Refinance
|
48%
|
20%
|
Purchase
|
52%
|
79%
|
Loan Type -
All
|
FHA
|
13%
|
25%
|
Conventional
|
83%
|
71%
|
VA
|
2%
|
1%
|
Other
|
2%
|
3%
|
Time To Close
(Days) — All
|
All
|
47
|
44
|
Refinance
|
53
|
52
|
Purchase
|
42
|
42
|
Average Interest
Rates
|
30 Year Note Rate —
ALL
|
3.10%
|
3.08%
|
30 Year Note Rate —
FHA
|
3.09%
|
3.08%
|
30 Year Note Rate —
Conventional
|
3.10%
|
3.08%
|
30 Year Note Rate —
VA
|
2.74%
|
2.74%
|
Average
FICO
|
748
|
727
|
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% 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, now part of
Intercontinental Exchange, Inc. (NYSE: ICE), is the leading
cloud-based platform provider for the mortgage industry. Ellie
Mae's technology solutions enable lenders to originate more loans,
lower origination costs, and reduce 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.
© 2020 Ellie Mae, Inc. Ellie
Mae®, Encompass®, AllRegs®, Mavent®, Velocify®,
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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SOURCE Ellie Mae