Home Is in the Heartland for Millennial Homebuyers

As housing prices continued to rise across the country, more Millennial homebuyers eyed cities in the American heartland where prices remain comparatively more affordable, according to data in the October Ellie Mae Millennial Tracker™. Minneapolis topped the list as the most popular metropolitan area for homes purchased by Millennial buyers (44 percent), followed closely by Philadelphia (43 percent), St. Louis (42 percent), Chicago (40 percent) and Detroit (40 percent). Two states, Florida and California, laid claim to the least popular cities for this new generation of homeowners: Miami (27 percent), Los Angeles (29 percent), San Francisco (30 percent), San Diego (30 percent) and Tampa-St. Petersburg (30 percent).

Slightly more than half of the Millennial borrowers who purchased a home were single (51 percent) compared to slightly less than half (49 percent) who were married. The average age of a homebuyer was 28.7 years old and men were much more likely to be listed as the primary borrower (64 percent) than women (33 percent). The average FICO score for Millennial borrowers was 722 and they opted to take out conventional loans (57 percent) more than FHA (40 percent), VA (1 percent) or unspecified financing options (1 percent) to purchase a home. The average loan amount for purchases was $182,498.

“As housing prices continue to rebound, Millennials are increasingly representing a higher percentage of homeowners in the middle of the country, where they can get more home for their money,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. “The average appraised value of homes purchased by this new generation of buyers was $223,153 in October, a modest increase from $221,383 in September, but nearly a five percent increase from when it was $212,939 in June.”

Other notable findings from the October Ellie Mae Millennial Tracker include:

• Purchases represented 77 percent of closed loans to millennials, down from 80 percent in September
• Refinances made up 22 percent of all closed loans to millennials in October, up from 20 percent in September
• The share of both conventional and FHA loans remained flat, making up 64 percent and 33 percent of all closed loans, respectively
• Across all loans, the average debt-to-income ratio (DTI) decreased to 23/36, down from 24/36 in September, while loan-to-value (LTV) remained stable at 87
• Average days to close for millennials held steady at 47 overall, with 46 days for conventional loans and 47 for FHA loans
• On average, it took millennial borrowers 49 days to close refinances and 45 days to close purchases
• The average amount for closed loans to millennial borrowers was $184,733 in October, a slight increase from an average of $184,179 the month prior
• The average loan amount for conventional loans made to millennials, $204,059, was essentially flat compared to $203,780 in September
• The average FHA loan amount received by millennial borrowers increased to $175,094, up from $174,015 in September

Ellie Mae® (NYSE:ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. The Ellie Mae Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. It mines data from a robust sampling of approximately 75 percent of all closed mortgages dating back to 2014 that were initiated on Ellie Mae’s Encompass® all-in-one mortgage management solution. Given the size of this sample and Ellie Mae’s market share, it is a strong proxy of millennial mortgage indicators across the country. Searches can be tailored by borrower geography, age, gender, marital status, FICO score and amortization type.

For more information, visit http://elliemae.com/millennial-tracker.

About the Ellie Mae Millennial Tracker

The Ellie Mae Millennial Tracker focuses on millennial mortgage applications during specific time periods. Ellie Mae defines millennials as applicants born between the years 1980 and 1999. New data is updated on the first Monday of every month for two months prior.

The Millennial Tracker is a subset of our Origination Insight Report, which details aggregated, anonymized data pulled from Ellie Mae’s Encompass origination platform. Additional information regarding the Origination Insight Report can be found at http://elliemae.com/resources/origination-insight-reports. News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.

About Ellie Mae

Ellie Mae (NYSE:ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. Mortgage lenders of all sizes use Ellie Mae’s Encompass® all-in-one mortgage management solution, Mavent Compliance Service, and AllRegs research, reference and education resources to improve compliance, loan quality and efficiency across the entire mortgage lifecycle. Visit EllieMae.com or call (877) 355-4362 to learn more.

© 2016 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, DataTrac®, Ellie Mae Network™, Mavent®, Millennial Tracker™, Mortgage Returns®, Prospect Manager, Total Quality Loan™, True CRM®, TQL™ and the Ellie Mae logo are trademarks of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

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