According to the latest Ellie Mae Millennial Tracker,
refinance activity climbed to 45% of all loans closed by millennial borrowers
in November 2020, up three percentage points from the month prior, and the
highest percentage since May 2020. Year-over-year, refinance share – the
percentage of all loans closed by millennial borrowers during the month that
were refinances – increased by 14 percentage points. The continued increase in
refinance activity happened as the average interest rate on all 30-year loans
dipped for the eighth consecutive month down to 2.97% – the lowest point since
Ellie Mae began tracking the data in January 2016.
Millennials refinancing their mortgages to lower their
monthly payments continued to increase loan volume, causing the average time to
close a refinanced loan to increase by two days month-over-month, from 58 days
to 60 days. Overall, average time to close for all loan types increased from 49
days in October to 52 days in November.
"With interest rates reaching historic lows,
millennials have refinanced to take advantage of a significant savings
opportunity they will see play out over the long-term," said Joe Tyrrell,
president, ICE Mortgage Technology. "Lenders are continuing to manage the
refinance pipeline by investing in virtual solutions such as eClosing, online
borrower portals, and virtual verifications, and turning this boom in loan
volume into business growth."
The Ellie Mae Millennial Tracker divides millennials into
two groups: older millennials – borrowers between 30 and 40 years old, and
younger millennials between 21 and 29 years old. For older millennials,
refinance share reached 52% in November, more than double the refinance share
of younger millennials at 24%. Both millennial sub-groups secured historically
low average interest rates; 2.97% and 2.94%, respectively, for older and
younger members of this demographic.
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, 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.
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