TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1096867
42 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Millennials Borrowing More Market pressures and rising interest rates aren't scaring away millennial buyers. M illennials are not afraid of a buyer's market, according to the February Ellie Mae Millennial Tracker. Despite rising interest rates and high demand for housing, the total number of purchase loans for this demographic rose 4 percent in December 2018 from Decem- ber 2017. Overall, purchase loans accounted for 88 percent of all millennial loans closed. This is a clear indication that millennials were not shying away from rising interest rates, which were at 5.12 percent on average, the highest since Ellie Mae began tracking this data in 2016. In contrast, refinance rates dropped 5 percent year-over-year, compris- ing 10 percent of all closed loans in December 2018. "Many millennials are prioritiz- ing homeownership, and rather than being deterred by a tight mar- ket, they're increasingly competing for available homes or moving to areas where inventory is more robust," said Joe Tyrell, EVP of Corporate Strategy for Ellie Mae. Millennials have adopted a more progressive lifestyle compared to the baby boomer generation, opting to hold off on traditional things like marriage before buying a home. For ex- ample, from 2016–2018, 63 percent of borrowers between the age of 20 and 29 were single when they closed their loans. If the housing market is any indicator, millenni- als are a driving force in today's economy and proving to change traditional trends. According to the report, millennials are flocking to the metropolitan statistical area of Somerset, Pennsylvania. Also in the top 10 metro areas are Odessa and Midland, Texas; as well as Burley, Idaho; Williston, North Dakota; Fargo, North Dakota- Minnesota; Minot, North Dakota; Casper, Wyoming; Columbus, Indiana; and Dubuque, Iowa. Men continue to make up the majority of millennial buyers, with 59 percent of total loans going to this group. The loans that millen- nials are opting for are primarily conventional (69 percent) followed by FHA (27 percent), VA (29 per- cent), and unspecified (3 percent).