Millennial home buying trend to continue into spring: Ellie Mae

Lower mortgage rates brought an increasing number of younger homebuyers into the market during February and that bodes well for the peak purchase season, according to Ellie Mae's Millennial Tracker.

Although millennials commonly make sacrifices in order to buy a home, purchases occupied about 87% of all closed loans made to this group during February. It represented an increase from 83% the year prior and a step up from January's 85%. As a potentially big spring buying season looms, it's a trend that could continue.

"The percentage of purchase loans is on the rise with millennials continuing to enter the home buying market for their first or maybe even second purchase," Joe Tyrell, executive vice president of corporate strategy for Ellie Mae, said in a press release. "The increase in days-to-close we saw in February is relative to the percentage increase in purchases versus refinances, as purchases typically take longer to close."

Refinance mortgages accounted for 11% of all millennial originations in February, a drop from 15% year-over-year and from 13% in January.

Conventional mortgages took up 68% of millennial's closed loans for February — an annual growth of 1 percentage point. Federal Housing Administration loans fell 1 percentage point year-over-year, accounting for 27%. Veterans Affairs loans stayed static at 2% of closed mortgages and unspecified loan types rose to 4%.

Millennial borrowers held an average FICO score of 720 in February, a decline from 724 a year earlier, and January's 722.

The average loan amount in January was $190,127, down year-over-year from $194,300 and month-over-month from $196,140. The gender discrepancy tilted 59% male to 31% female with 10% unspecified. Overall, 51% of the primary borrowers were listed as married compared to 48% single.