July 30, 2021

MP Now News

Mortgage News

Tracker Shows Millennials Taking Advantage of Loosening Credit Standards

The percentage of purchasing activities in total loans concluded for applicants born between 1980 and 1999 has risen for the third month in a row ICE Mortgage Technology Millennial Tracker.

In May, 67% of loans completed by millennials on the Encompass by ICE Mortgage Technology issuing platform were for purchases, up from 61% in April 2021 and 51% in March 2021.

The average purchase credit amount for this audience is $ 220,279. The tracker showed that 84% were conventional loans, while 13% were Federal Housing Administration loans and 1% were VA loans. (2% unspecified).

Purchases accounted for 82% of loans taken out by younger millennials (born between 1991 and 1999), up from 78% in April. Among older millennials (millennials born between 1980 and 1990), purchases accounted for 60% of all loans completed, up from 53% in April.

“We see a strong and competitive buying market across the country, especially among millennials,” said Joe Tyrrell, president of ICE Mortgage Technology.

Average FICO scores for millennial borrowers fell for the fourth straight month. In May, the average FICO scores for borrowers of this generation decreased from 734 in April and 739 in March to 732.

“With the FICO score requirements easing, millennials are taking advantage of the current environment to continue their home ownership,” said Tyrrell.

May was also the second month in a row that the buying share for older millennials was greater than the refinancing share. In May, 60% of senior millennials’ loans were purchases, while 38% were refinances. Older Millennials have completed no more purchases than refinances since August 2020, when cohort purchases accounted for 52% of the completed loans.

The median age of millennial borrowers is around 32 years. In May, the average age of borrowers was unchanged from the April average of 32.4 years.

The average loan completion days for all Millennial borrowers decreased from 48 in April to 46. Refinance loan completion days decreased from 52 in April to 50 in May, while purchase loan completion days, according to Tracker remained constant at 44 days.

Older millennials

Younger millennials

Closed Loans (Proportion) – All

Refinancing

38%

17%

purchase

60%

82%

Loan type – All

FHA

14%

21%

Conventional

82%

75%

become

2%

1%

Other

2%

2%

Closing Time (Days) – All

All

46

45

Refinancing

49

46

purchase

45

43

Three out of five millennials and zoomers who responded a recent Zillo survey last week they said plan use money saved during the pandemic towards a down payment on a home. After “paying for a living”, it was the most common way that respondents who saved last year said they were spending their money.

Zillow researcher Manny Garcia reported that “property ownership still seems to be a priority and pursuit among what are sometimes referred to as the” Rent forever generation, “refers to a Business Insider Articles about millennials opting out of home ownership.

The ICE Mortgage Technology Millennial Tracker is an interactive online tool that provides access to current demographics for this new generation of homebuyers. It collects data from a robust sample of approximately 80% of all closed-end mortgages in 2014 initiated on Encompass by ICE Mortgage Technology. Search can be customized by geography of the borrower, age, gender, marital status, FICO score and repayment type.