Photo: Katie Haugland Bowen/Flickr
The time it took for Millennial homebuyers in the US to close loans sped up in February to its fastest pace in nearly a year. Ultimately, this could be a good indicator that more Millennials are entering into the market as first-time buyers, according to a new report released earlier this week by the mortgage processing tech company Ellie Mae.
In February, the average time it took Millennial borrowers to close all loans dropped to 44 days — the shortest average time since March 2016, says the Ellie Mae Millennial Tracker.
The tracker focuses specifically on Millennial mortgage applications during given time frames. Ellie Mae, which processes almost a quarter of all US mortgage applications, defines a “Millennial borrower” as a person born between 1980 and 1999.
Millennials took an average of 42 days to close purchase loans, and an average of 52 days to close a refinance loan in February — down 4 days and 6 days respectively from the previous month.
February’s hottest Millennial housing market was Texas, which had the highest percentage of Millennial loans closed for the month.
“Purchase loans are increasing, indicating that Millennials are continuing to enter the first-time homebuyer market,” said Ellie Mae executive vice president of corporate strategy Joe Tyrrell.
He added that Ellie Mae’s lenders were seeing more efficiency as they “embrace automation,” indicated by February’s closing pace.
Millennials comprise the largest generational group of homebuyers, around 35 percent, for the last four consecutive years, according to a recent report by the National Association of Realtors. And while the oft maligned generational group has seemingly put off buying a home longer than previous generations due to hefty student loan burdens, tight supply, rising home prices, and slow national wage growth, a report by the listing site Zillow found that Millennials do look at a home as a smart financial investment. (link to article 2)
Zillow also discovered that as more and more Millennials enter the housing market, most as first-time homebuyers, they tend to favor suburban areas. This was clearly seen in Ellie Mae’s hottest Millennial markets for February — Odessa, TX, Midland, TX, and Beaumont-Port Arthur, TX.
Click here to read the entire report.