Millennial refinances see jump amidst dropping mortgage rates

Is it time to refi?

It seems Millennial homeowners are taking advantage of lower mortgage rates. According to new data, Millennial refinances have officially hit their highest point in more than a year.

Low rates spur Millennial refinance boom

According to Ellie Mae’s latest Millennial Tracker, Millennial refinances accounted for 15 percent of all loans for the cohort in April. That’s a 4 percent uptick over March and their highest point since early 2018.

Increasing adoption of technology by mortgage lenders, as well as some maturing on Millennials’ parts, both play a role in this increase, according to Joe Tyrell, Ellie Mae’s executive vice president of strategy and technology.

“Interest rates continued to drop in April and Millennials jumped on the opportunity to refinance,” Tyrell said. “The significant drop in time to close shows homebuyers were motivated to close refinances while rates were low, and that Millennials are showing increased maturity as a homeowning demographic.”

For Millennials, buying a home is more important than getting married or having kids

Millennial money management

But Millennials aren’t just proving their maturity; they’re improving their financial stations, too. According to the tracker, the average FICO score of Millennial borrowers increased to 721 in April — well above the national average of 704.

They’re also increasingly turning toward conventional loans — known for their more stringent lending standards and requirements. Conventional loans accounted for 69 percent of all Millennials mortgages in April. More lax FHA loans made up just 26 percent.

Millennials outrank Baby Boomers on recent mortgages

Millennials borrowers who used conventional loans had an average FICO score of 745 for the month — the highest score since 2016. Borrowers who used an FHA loan had an average 670 score.

Get today’s mortgage rates

Are you looking to join the ranks of Millennials homeowners? Then shop around and see what mortgage rates you qualify for today.