Millennial homebuyers continue to age
Even though more borrowers between the ages of 21 and 40 took advantage of historically low mortgage rates in January, the average age has reached an all-time high, a sign they are delaying homeownership, according to ICE Mortgage Technology.
The average age of millennials has risen to 33, from 31.3 in January 2020 and 31.9 in December. The next highest average age came in April 2020 at 32.3 years old.
These borrowers locked in a 30-year average interest rate of 2.881% in January – a falling number that continues to set new records for the Millennial Tracker. The rate fell 3.935% the year before and 2.928% in December.
With historically low mortgage rates allowing buyers to afford more homes, the average millennium loan amount jumped $ 10,241 per year and $ 6,953 per month to a record high of $ 221,459.
Married people accounted for a 61% segment of closed loans, up from 55% the previous year and a slight increase from 60% the month before. Overall, around 56% of primary borrowers were men, 29% of women with 15% who did not specify.
Marriage is the life event that usually precedes the purchase of a home. While married couples still cover the majority of homebuyers, these numbers could start to be different with millennials marrying later in life, with more unmarried couples buying homes together and some even forgoing large marriages in favor. down payment – especially during the pandemic.
“Weddings are often relatively the same as a down payment in some cities,” said Jess Kennedy, Co-founder of Beeline, General Counsel and Chief Compliance Officer. “If you combine couples who increasingly want to live together before they marry and the desire to pay their own mortgage rather than someone else’s, it makes sense that so many young couples choose to buy a mortgage. house before celebrating the big day. ”
Among extreme competition, millennials will go to great lengths to secure their first home. Almost 80% of millennials are said to be buy a house seen invisible, including 29% who would only do so after seeing photos or a virtual tour, according to Clever Real EstateMillennium Homebuyers Report 2021.
“Millennial homebuyers, and homebuyers in general, are so eager to buy homes in this seller’s market that they can make decisions they wouldn’t make in a less competitive market.” a representative for Clever said in a statement to NMN. “Buying on sight without being seen is a risky bet that millennials are prepared to make. “
Conventional mortgages accounted for an 84% share of loan origination, compared to 71% year-on-year and 81% month-on-month. Federal Housing Administration loans edged down to 13% and US Department of Veterans Affairs loans were flat at 1%. Other unspecified types of funding accounted for the remaining 2%.
Refinances took the lion’s share of the fixtures, covering 53% as millennials – especially the older contingent who have probably owned it longer – surged to low mortgage rates. This is up from 31% a year ago and 46% the month before. The share of purchases fell to 46%, from 68% year-on-year and 54% month-on-month. As the volume continues to rise, the close time has inflated to 54 days, from 47 in January 2020 and 52 days in December.
The gaps change when looking at the data between older borrowers (ages 30-40) and younger borrowers (ages 21-29) of millennials.
The senior group’s purchasing share in January was 40%, compared to 71% for the younger group. By type of loan, conventional mortgages accounted for 86% of the shares of older millennials versus 74% for younger people, while FHA loans accounted for 11% and 22%, respectively. Older millennials had average FICO scores of 748 while younger millennials – who haven’t accumulated credit for that long – hit 729.