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Millennials Contributing to The Ongoing Refinance Boom

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Pleasanton, CA – Nov. 4, 2020 (PRNewswire) With interest rates nearing 3% for all loans, many millennials took advantage of the opportunity to refinance their mortgages in September, according to the latest Ellie Mae Millennial Tracker. Refinances climbed to 43% of all closed loans for millennials in September, up 3% from the previous month.

Refinances accounted for 51% of Conventional loans in September, the highest percentage since June, and up from 48% just the month prior.

In September, older millennials locked in slightly higher interest rates of 3.00%, on average, compared to 2.98% for younger millennials. With interest rates historically low, the share of refinance loans increased for both sub-groups of millennials.

While millennials are buying homes, the end to summer homebuying seasonality meant purchases dipped for the second month in a row, accounting for 56% of all closed loans, down from 59% in August.

“We have seen a steady increase in refinances among millennials over the past month, as homeowners took advantage of historically low interest rates,” said Joe Tyrrell, president, ICE Mortgage Technology, a division of Intercontinental Exchange, Inc. (NYSE: ICE). “However, the bulk of the millennial generation is still entering the market as first-time homebuyers and they’re swooping up the limited inventory that is available in most markets.”

Conventional purchase loans shrunk to 48% for the month, down from 52% in August. VA refinances stayed steady at 35% month-over-month, and VA purchase loans held at 65% month-over-month during this same time period. Meanwhile, FHA percentages have held steady for the past four months.

Time-to-close for all loans increased to 49 days in September, compared to 47 in August. Given the increase in refinances, the time-to-close on refinance loans also increased by two days, month-over-month, to 55 days in September.

The Ellie Mae Millennial Tracker offers insights into two groups of millennial homebuyers: older millennials between 30 and 40 years old, and younger millennials between 21 and 29 years old.

Ellie Mae Millennial Tracker – Older Millennials vs. Younger Millennials
Older MillennialsYounger Millennials
Closed Loans (Share) — All
Refinance51%22%
Purchase48%77%
Loan Type – All
FHA12%24%
Conventional85%72%
VA1%1%
Other1%3%
Time To Close (Days) — All
All5045
Refinance5554
Purchase4443
Average Interest Rates
30 Year Note Rate — ALL3.00%2.98%
30 Year Note Rate — FHA2.99%2.98%
30 Year Note Rate — Conventional2.99%2.97%
30 Year Note Rate — VA2.74%2.74%
Average FICO747728

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 80% 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, now ICE Mortgage Technology, a division of Intercontinental Exchange, Inc. (NYSE: ICE), is the leading cloud-based loan origination platform provider for the mortgage industry. Ellie Mae’s technology solutions enable lenders to originate more loans, lower origination costs, and reduce the time to close, all while ensuring the highest levels of compliance, quality, and efficiency. Visit ‪EllieMae.com or call ‪(877) 355-4362 to learn more.

© 2020 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, Mavent®, Velocify®, Capsilon®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

July Ellie Mae Origination Insight Report Data Shows Homebuyer Purchase Activity On The Rise; Interest Rates Continue To Fall

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Pleasanton, CA – Aug. 19, 2020 (PRNewswire) Home purchases represented 46 percent of all closed loans in July, up from 42 percent in June according to the latest Origination Insight Report from Ellie Mae®, the leading cloud-based loan origination platform provider for the mortgage industry. Refinances still represented the majority of closed loans in the month at 54 percent, down from 58 percent the month prior.

The 30-year rate on all loans continued to drop to 3.24 percent, down from 3.40 percent in June. The 30-year note rate on conventional loans fell to 3.26 percent in July, down from 3.42 percent in June. Similarly, the 30-year rate on FHA loans fell to 3.26 percent in July, down from 3.41 percent in June. The 30-year rate on VA loans dropped to 3.02 percent in July, down from 3.20 percent in June.

Other statistics of note in July included:

  • The time to close all loans held at 47 days for the second month. Time to close for purchase loans decreased to 44 days, down from 46 the month prior, while time to close refinances increased to 50 days, up from 48 days the month prior.
  • FICO scores increased month-over-month for refinances across Conventional, FHA and VA loans.
  • Closing rates increased to 77.1 percent in July, up from 73.4 percent in June.

“Interest rates have continued to decrease, down to 3.24 percent in July. If we look at this month versus the same time in 2019, interest rates are down close to a full percentage point, giving new homebuyers the opportunity to stretch their dollar as they purchase and existing homebuyers the ability to reduce monthly costs,” said Jonathan Corr, President and CEO of Ellie Mae. “We’re also seeing an increase in closing rates for Ellie Mae lenders highlighting the value of mortgage technology as they contend with significant volume, remote workforces and homebuyers looking to complete the process completely online.”  

The Origination Insight Report mines data from a robust sampling of approximately 80 percent of all mortgage applications that were initiated on the Encompass® all-in-one mortgage management solution. Ellie Mae believes the Origination Insight Report is a strong proxy of the underwriting standards employed by lenders across the country.

In addition to the Origination Insight Report, Ellie Mae also distributes data from its monthly Ellie Mae Millennial Tracker on the first Wednesday of each month. The Ellie Mae Millennial Tracker focuses on mortgage applications submitted by borrowers born between the years 1980 and 1999.

Ellie Mae also offers Ellie Mae Insights™, the only analytics solution in the market that provides peer benchmarking comparison analysis in near real time. Ellie Mae Insights analyzes key metrics such as efficiency levels, operational costs, rates and market penetration, demographic data and pull through rates to help lenders of all sizes to make informed decisions.

MONTHLY ORIGINATION OVERVIEW FOR JULY 2020

July 2020*June 2020*6 Months
Ago(Jan. 2020*)		1 Year Ago(July 2019*)
Closed Loans
Purpose
Refinance54%58%50%38%
Purchase46%42%50%62%
Type
FHA11%10%16%17%
Conventional79%80%71%69%
VA6%7%8%10%
Days to Close
All47474842
Refinance50484840
Purchase44464843
Percentage of ARM and Fixed Loan Volume
ARM %3.0%3.5%5.3%5.7%
30-Year Rate
Average3.24%3.40%3.96%4.18%

*All references to months should be read as month ended.

PROFILES OF CLOSED LOANS FOR JULY 2020

Closed First-Lien Loans
(All Types)
FICO Score (FICO)750
Loan-to-Value (LTV)75
Debt-to-Income (DTI)23/35

More information and analysis of closed and denied loans by loan purpose and investor are available in the full report at http://www.elliemae.com/about-us/news-reports/ellie-mae-reports/.

To get a meaningful view of lender pull-through, Ellie Mae reviewed a sampling of loan applications initiated 90 days prior—or the April 2020 applications—to calculate an overall closing rate of 77.1 percent in July 2020 (see full report).

About the Ellie Mae Origination Insight Report

The Origination Insight Report focuses on loans that closed in a specific month and compares their characteristics to similar loans. The closing rate is calculated on a 90-day cycle rather than on a monthly basis because most loan applications typically take one-and-a-half to two months from application to closing. Loans that do not close could still be active applications or applications withdrawn by consumers or denied for incompleteness or non-qualification.

The Origination Insight Report details aggregated, de-identified data pulled from Ellie Mae’s Encompass origination platform.

News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.

About Ellie Mae

Ellie Mae is the leading cloud-based loan origination platform provider for the mortgage industry. Ellie Mae’s technology solutions enable lenders to originate more loans, lower origination costs, and reduce the time to close, all while ensuring the highest levels of compliance, quality, and efficiency. Visit ‪EllieMae.com or call ‪(877) 355-4362 to learn more.

© 2020 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, Mavent®, Velocify®, Capsilon®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

SOURCE Ellie Mae

Millennials Will Lead Surge in Purchase Market, According to Ellie Mae Millennial Tracker

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Pleasanton, CA – Aug. 5, 2020 (PRNewswire) Millennial purchase activity is on the rise, according to the latest Ellie Mae Millennial Tracker. Purchase share – the percentage of all loans closed during the month that were purchases – grew for the second straight month, reaching 56% in June, up nine percentage points from May. This marks the highest purchase share since March 2020.

“Millennials represent the single biggest opportunity in the housing market today,” said Ellie Mae Chief Operating Officer, Joe Tyrrell. “Per U.S. Census data, there will be over 4 million millennials reaching the age of 29 to 30, each year for the next several years. That is important, because our data shows that is the average age when Millennials enter the homebuying market.”

According to Ellie Mae data, in Q2 2020, millennials were responsible for more closed purchase loans than any other generation.

“Millennials are emerging as a dominant force relative to driving the purchase market forward in the next few years,” said Tyrrell. “Our data indicates that while we’re currently seeing an upturn in millennial purchase activity, the true boom is just starting. We expect that their entry into the market, as they reach prime homebuying age, will fuel purchase transactions in 2021, 2022 and 2023.”

During June, millennial purchasing power grew as the average interest rate for all loans closed by this generation fell to a new Ellie Mae Millennial Tracker low of 3.36%. The previous low occurred just one month prior, when the average rate dropped to 3.42%.

Average time to close on all loans increased from 43 days in May to 45 days in June. Time to close for refinances jumped five days – from 44 days to 49 – during this time. Average time to close has risen month-over-month during every month since March.

“With every passing day, it becomes more apparent just how critical digital mortgage technology is to lenders right now,” said Tyrrell. “Capabilities like online applications, automatic updates and eClosing offer millennial customers the seamless digital experiences they expect while freeing up time for the human interaction necessary to answer questions or concerns they may have as they navigate the homebuying process for the first time.”

The Ellie Mae Millennial Tracker divides millennials into two groups: older millennials – borrowers between 30 and 40 years old, and younger millennials – borrowers between 21 and 29 years old.

Average interest rates were nearly identical for the two groups, with younger millennials securing an interest rate of 3.35%, on average, compared to 3.34% for older millennials. Younger millennials also had a lower average FICO score, as this sub-group gravitated toward FHA loans, which have less stringent credit requirements.

Millennials in their 20s were more likely to buy homes in June. Their share of purchase was 78%, compared to 47% for older millennials, who are more likely to already own a home and seek to refinance.

Ellie Mae Millennial Tracker – Older Millennials vs. Younger Millennials

Older MillennialsYounger Millennials
Closed Loans (Share) — All
Refinance52%21%
Purchase47%78%
Loan Type – All
FHA13%24%
Conventional84%72%
VA2%1%
Other2%3%
Time To Close (Days) — All
All4542
Refinance4947
Purchase4240
Average Interest Rates
30 Year Note Rate — ALL3.34%3.35%
30 Year Note Rate — FHA3.36%3.37%
30 Year Note Rate — Conventional3.34%3.34%
30 Year Note Rate — VA2.97%2.93%

Ellie Mae®is the leading cloud-based platform provider for the mortgage finance 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 80%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 is the leading cloud-based platform provider for the mortgage finance industry. Ellie Mae’s technology solutions enable lenders to originate more loans, reduce origination costs, and shorten the time to close, all while ensuring the highest levels of compliance, quality and efficiency. Visit EllieMae.com or call 877.355.4362 to learn more.

© 2020 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, Mavent®, Velocify®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

SOURCE Ellie Mae