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Millennials Step Back (Slightly) From FHA Loans: Ellie Mae Millennial Tracker™

August 9, 2017 at 9:00 AM EDT

PLEASANTON, Calif.--(BUSINESS WIRE)--Aug. 9, 2017-- 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.

Source: Ellie Mae, Inc.

Ellie Mae, Inc.
Erica Harvill, 925-227-5913
Erica.harvill@elliemae.com
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Allison+Partners
Alexandra Gardell Kreuter, 646-428-0618
EllieMae@allisonpr.com