Lower rates lead to surge in Millennial refinancing
Thanks to low mortgage rates, refinancing activity has jumped in recent weeks – especially with Millennials. In fact, according to new data, nearly a third of all recent Millennial loans were refinances.
Refinancing is big with older Millennials
According to the latest Millennial Tracker from mortgage technology provider Ellie Mae, 31% of all Millennial loans in January were refinances. With older Millennials – those aged 30 to 40 – refinancing was even more popular, accounting for 38% of all mortgage loans for the month.
Of those Millennials refinancing, the average age was 32.6 and the average FICO score 746 – well above the national average of 703. The average appraised value of homes being refinanced clocked in at $335,314.
Refinancing is also growing in popularity amongst all age groups. According to data from the Mortgage Bankers Association, refinances jumped 15.1% last week, accounting for more than 66% of all loan applications. The week’s average 30–year mortgage rate (3.29%) was the lowest on record, according to Freddie Mac.
Where Millennials are most active
Home prices have been rising across the country, and it’s clear from Ellie Mae’s data that Millennials are having to get creative in where they buy homes. According to the Millennial Tracker, the top cities for Millennials currently include Carlsbad, New Mexico; Eagle Pass and Odessa, Texas; Williston, North Dakota; Clinton, Iowa; and Aberdeen and Brookings, South Dakota.
Joe Tyrrell, chief operating officer at Ellie Mae, predicts this trend will continue as we get further into the year.
“With the purchase power of Millennials increasing and inventory still tight across the country, we expect Millennials to continue to search outside of major metropolitan areas – where there is more inventory – when making their homebuying decisions,” he said.
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