The percentage of mortgages issued to millennials continued to climb in January, with the group accounting for 84 percent of closed loans, according to the latest Ellie Mae Millennial Tracker.
Ellie Mae said millennials accounted for 82 percent of closed loans in December 2016 and 77 percent from August 2016 through November 2016. Thirty-five percent of loans issued to millennials during January were from the Federal Housing Administration (FHA), up from 34 percent in December 2016.
“As the purchase market heats up, we will continue to watch the FHA purchase trend amongst millennials,” Ellie Mae Executive Vice President of Corporate Strategy Joe Tyrrell said in a press release. “It is not surprising to see millennial borrowers leverage FHA loans because they typically offer lower downpayments and lower average FICO score requirements than conventional loans. As more millennials enter the market, we expect to see the popularity of FHA loans continue to increase.”
Ellie Mae’s tracker also found that the average FICO score of January borrowers was 724, down slightly from their peak of 726 from August 2016 through October 2016.
Additionally, the report found, the time it took millennials to close loans during January (49 days) was a day longer than the process took during November 2016 and December 2016.