The pandemic hit at a time when millennials are aging through the typical milestones that often lead to the purchase of a home.
"This year, the largest section of millennials will turn 30, entering their prime homeownership years," Mark Fleming, chief economist at First American Financial, said in a press release. "Though the pandemic presents new challenges to achieving homeownership, millennial lifestyle decisions will continue to support potential homeownership demand in the years ahead, meaning millennials may be poised to fuel a 'roaring 20s' of homeownership demand."
Millennials are the biggest generational demographic in the U.S. While many put off buying houses for personal or professional reasons, homeownership demand in that group grew 3 percentage points annually in 2019, compared to 1.7 points for Generation X and 0.8 points for baby boomers, according to First American's Homeownership Progress Index.
"It appears millennial homeownership has been delayed, not denied," Fleming added.
While the pandemic ushered in an economic downturn, it came with bottomed-out interest rates and a corresponding spike in mortgage demand.
In May, the average 30-year interest rate locked in by millennials dropped to 3.42% from 3.48% month-over-month and from 4.53% in May 2019, according to Ellie Mae's Millennial Tracker. It marks the lowest average millennial interest rate since Ellie Mae began its monthly report in January 2016, falling in line with the
Refinances made up about 53% of loans closed to millennials in May, down
"The refinance market is still strong, but as we progress further into what is traditionally peak home-buying season, we're seeing the purchase market come to life as historically low interest rates
As the country wrestles financial unpredictability, lenders preferred to take less risk. The average
"We're in an era marked by economic volatility and this has
Conventional mortgages accounted for about 83% of completed loans to millennials in May, while 14% were
Males made up nearly 60% of the primary borrowers, with
When split between older millennials (borrowers between 30 and 40 years old) and younger millennials (borrowers between 21 and 29 years old) the breakdowns logically shift.
The refinance share for the elder group reached 61% in May compared to 29% for the younger group. By loan type, conventional mortgages made up an 86% share for older millennials versus 75% for younger and FHA loans made up 11% and 22%, respectively.