More Millennials refinancing as rates hit 2017 low

Millennials jumping on low mortgage rates

It seems Millennials are really taking advantage of today’s mortgage rates, which just last week hit their lowest point of the year.

According to Ellie Mae’s Millennial Tracker, refinances accounted for 11 percent of all Millennial loan activity in July alone. For conventional (non-government) loans, refinances made up 14 percent.

Refinancing up

Both stats mark an uptick over June, when the refinance share of all Millennial loan activity was 10 percent, and conventional loan activity was 12 percent.

According to Joe Tyrell, executive vice president of corporate strategy at Ellie Mae, the rise is likely due to limited housing inventory.

“Between the competitive housing market with limited inventory and the 30-year note rate at a 2017 low, some Millennial homeowners may be deciding to stay put and take advantage of the opportunity to refinance,” Tyrell said.

“With many more Millennials interested in becoming homeowners for the first time, however, the purchase market is still very strong.”

Closing times down

Millennials are enjoying more than just low rates. Ellie Mae also found that average closing times have dropped two days since June.

In California, for example, Millennial borrowers close in just 37 days on average. Those in Illinois wait two days more, with a 39-day time-to-close. The overall average time to close on Millennial refinances is 46 days.

Millennials tend to prefer conventional loans. According to Ellie Mae’s Millennial Tracker, conventional products comprised 64 percent of all Millennial loans in July. FHA loans got a 32 percent market share, and VA loans made up two percent of all Millennial loan activity.

Credit scores increase

Millennial borrowers are also coming in with higher FICO scores, according to the Tracker. The average borrower boasts a score of 724 across all loan types. Scores are highest with conventional borrowers (748), followed by VA (742) and FHA (688).

Taking advantage of fast closing times, low mortgage rates and great credit scores, today’s Millennials are taking on both home buying and refinancing.

What are today’s mortgage rates?

Current mortgage rates are spurring all this activity, and they remain very attractive. You can save even more by shopping aggressively and comparing offers from several lenders.