MReport January 2020

TheMReport — News and strategies for the evolving mortgage marketplace.

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46 | 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 More Millennials Embracing Refinancing What percentage of all loans closed by millennials are refis? E llie Mae reports that 34% of all loans closed by millennials in October were refinances—a monthly increase of 1% and the highest refinance share since data began being tracked in 2016. Refinances accounted for 41% of conventional loans closed by millennials, which is a marginal increase from September's 40%. The refinance share of FHA loans remained at 10%. The refinance share for VA loans fell six-percentage points to 42%. The share of refinancing peaked in October as the average interest rate on 30-year loans fell to 3.9% from 3.91% in September. October was also the second consecutive month that the average interest rate on a 30-year loan was below 4%. Interest rates had not fallen below 4% since December 2016. "Declining interest rates have significantly increased millennials' awareness of refinancing as a fiscally responsible option, and we're seeing more and more homeowners in this demographic take advantage of refinancing their mortgages," said Joe Tyrrell, COO, Ellie Mae. "Heading into 2020, lenders should proactively reach out to prospective millennial homebuyers whose likelihood of purchasing a home has now increased due to these historically low-interest rates." The time it took to close a refinance loan in October increased two days to 44 in October. This trend was consistent for all loan types: conventional (44); FHA (51); and VA (48). Homeowners in Miami had to wait the longest to close a refinance loan, as the average wait time was 48 days. Chicago was close behind at 44, followed by Austin, Texas (43); San Francisco (43); Los Angeles (42); San Diego, California (41); and Dallas (41). The average age of a primary borrower was 30.6-years-old— tied for the highest mark of any month in 2019. Conventional loans accounted for 74% of all closed loans, compared to 21% for FHA loans, 2% for VA loans, and 3% for "other" loans. Ellie Mae reported in November that the share of refinances accounted for 51% of all closed loans in October—the highest share of refinances since March 2015. United

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