In housing markets dominated by young borrowers, millennials took an even bigger share of overall mortgage activity in August.
At 72%, Lima, Ohio, had the largest share of millennial mortgage borrowers in August, according to data from mortgage software developer Ellie Mae. A year ago, the top market for millennials was Dickinson, N.D., but the market share was only 61%. The year-over-year trend was similar in each of the top 10 housing markets dominated by millennials in August.
Top Millennial Housing Markets | |||
Aug. '17 | Millennial Share | Aug. '16 | Millennial Share |
Lima, OH | 72% | Dickinson, ND | 61% |
Batavia, NY | 71% | Safford, AZ | 58% |
Dyersburg, TN | 71% | Beaumont-Port Arthur, TX | 56% |
Roswell, NM | 71% | Huntington, IN | 56% |
Kendallville, IN | 69% | Terre Haute, IN | 52% |
Aberdeen, SD | 65% | Laredo, TX | 51% |
Sayre, PA | 64% | Kendallville, IN | 50% |
Williston, ND | 58% | Decatur, IN | 50% |
Ottumwa, IA | 57% | Texarkana, TX-AR | 49% |
Dickinson, ND | 57% | McAllen-Edinburg-Mission, TX | 48% |
In August, conventional loans for millennials remained steady at the end of the summer, and comprised 64% of all loans closed by the generation. FHA mortgages
Despite the average 30-year note rate having increased about 0.5% from last year, the average loan amount for loans closed by millennial borrowers inched up to $185,919 in August. Millennials closed an average of $184,113 in loans during the same period last year.
"As tends to happen with tight inventories, this is a seller's market, and many of today's home buyers may be faced with paying a premium for the same home they might have bought for less last year," said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae, in a press release. "For those who are committed to buying a home, though, slight increases in competition, costs or interest rates will likely not deter them."
The average millennial primary borrower in August was 29.4 years old with a conventional loan amount of $185,919 to purchase a home with a $223,882 average appraised value. The average borrower had a 724 FICO score, helping to secure a 30-year note rate of 4.211%. At 64%, the majority of primary borrowers were male, closed their homes in about 44 days, and about 52% were married.
Female borrowers increased their purchase power, with closed loans averaging $189,574, up from $184,094 from last year.
Average millennial borrowers on the West Coast were slightly older at 30.6 years old, taking out an average loan amount of $314,579. In the Midwest, loan amounts were lower, with borrowers taking out an average loan amount of $158,584 in Kansas, for example. Comparatively, in Hawaii, borrowers aged 31.4 years took out loans amounting to about $396,766.
Overall, 87% of loans closed by millennials in August were for a home purchase, and 12% were for a loan refinance.