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42 | 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 Dominate Refi Frenzy This demographic more than any other "found themselves in a great position to take advantage of the historically low rates." A decade ago, mortgage brokers boasted about low interest rates on 30-year mortgages. But then 2020 came along, and rates dipped lower than they ever had before, sending millennials into a refinancing frenzy, according to the ICE Mort- gage Technology Millennial Tracker. For nine months in a row, rates fell lower and lower, hitting 2.93% in December 2020. At the same time, refinance activ- ity represented 46% of all loans. "Millennials, even those that had just purchased a home in the past few years, found themselves in a great position to take advantage of the historical- ly low rates and contrib- uted to the ongoing high refinance volume," said Joe Tyrrell, President, ICE Mortgage Technology. "At the same time, lenders that have already adopted vir- tual solutions, like eClose, are seeing their early investments really pay off as they are better positioned to efficiently manage this long-term refinance boom." The tool separates millennials into two groups: older millenni- als, which are between 30 and 40 years old, and younger millennials, those between 21 and 29 years old. Refinancing for older millenni- als jumped to 53% in December, whereas younger millennials were responsible for 26% of refinances. The younger subset was able to secure a lower rate on average, 2.90% versus 2.93%. As for the time it took to refinance, average closing time for all loans took 52 days, which is nine days longer than it took in December 2019. Data for the ICE Mortgage Technology Millennial Tracker is mined from approximately 80% of mortgages initiated on ICE Mortgage Technology's Encompass all-in-one mortgage management solution. Data goes back to 2014. Home Sales See Near 25% YOY Rise Housing remains in high demand as vaccinations are rolled out and stimulus measures are passed to start 2021. T he National Associa- tion of Realtors reports that existing-home sales rose in January, mark- ing two consecutive months of growth, increasing 0.6% from December 2020 to a seasonally adjusted annual rate of 6.69 mil- lion in January 2021. Total sales climbed year over year, up 23.7% from one year ago. "Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtu- ally every new listing coming on the market," said Lawrence Yun, NAR's Chief Economist. "Sales easily could have been even 20% higher if there had been more inventory and more choices." The median existing-home price for all housing types in January was $303,900, up 14.1% from January 2020 where prices averaged $266,300, with prices in- creasing in every region. January's national price jump marks 107 straight months of year-over-year gains. "Home sales are continuing to play a part in propping up the economy," Yun said. "With addi- tional stimulus likely to pass and several vaccines now available, the housing outlook looks solid for this year." Yun predicts existing-home sales will reach at least 6.5 million in 2021, even as he says mortgage rates are likely to inch higher due to the rising budget deficit and higher inflation. Total housing inventory at the end of January amounted to 1.04 million units, down 1.9% from December and down 25.7% from one year ago (1.40 million). Properties typically remained on the market for 21 days in January, seasonally even with December, and down from 43 days in January 2020. Seventy-one percent of the homes sold in January 2021 were on the market for less than a month. First-time buyers accounted for 33% of total sales in January, up from 31% in December 2020, and from 32% in January 2020. Individual investors or second- homebuyers purchased 15% of homes in January, up from 14% in December 2020, but down from 17% in January 2020. All-cash sales accounted for 19% of transac- tions in January, unchanged from December but down from 21% in January 2020. Distressed sales represented less than 1% of sales in January, equal to December's percentage, but down from 2% in January 2020. "Millennials, even those that had just purchased a home in the past few years, found themselves in a great position to take advantage of the historically low rates and contributed to the ongoing high refinance volume." —Joe Tyrrell, President, ICE Mortgage Technology