Millennial home buyers see time-to-close shrink to four-year low

Aly J. Yale
The Mortgage Reports contributor

Digital mortgages mean faster closing

Millennial home buyers are in luck. Thanks to the increased adoption of digital mortgage processes, today’s up-and-coming buyers now enjoy the shortest time to close since 2014.

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39 days and done

According to the latest Millennial Tracker from Ellie Mae, it took Millennial home buyers just 39 days to close on their loans in March – the shortest time recorded in more than four years.

Joe Tyrrell, Ellie Mae’s executive vice president of corporate strategy, Millennials have digital mortgage tools to thank for it.

“With the ongoing adoption of digital mortgage solutions, Millennial homebuyers were able to close purchase loans in 39 days in March, the shortest amount of time since Ellie Mae began tracking Millennial loan data in January 2014,” Tyrrell said. “As more Millennials reach the prime home-buying age of 29 to 32 years old, they are finding a mortgage experience leveraging technology that is fast and engaging in ways that their parents couldn’t imagine when they were buying their first home.”

Time to close was fastest on purchase loans, at 39 days. Conventional loans closed in an average of 40 days, while FHA and VA loans closed in 41 and 44 days, respectively.

How long does it take to close a mortgage?

More Millennial moves

The month of March also saw several changes in the general makeup of Millennial buyers. According to Ellie Mae’s data, the average age of a Millennial home buyer rose from 29.5 to 30.1, while the average FICO score for a Millennial dropped to 721 – down from 724 in February.

Home buying trends: Millennials are more conventional than you might think

Male Millennial buyers had slightly higher scores at 723 v. females’ 722. Millennials also showed lower debt-to-income ratios than the average borrower (25/38 v. 26/39), as well as higher loan-to-value ratios (87 v. 79).

The top cities for Millennial buyers were Dyersburg, Tennessee; Binghamton, New York; Fairmont, West Virginia; and Mount Sterling, Kentucky. Millennials accounted for 73 percent of all closed loans in Dyersburg in March.

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