With interest rates for 30-year mortgages declining, Millennials moved quickly to close their mortgages in March 2019. According to the latest Ellie Mae Millennial Tracker, the average 30-year note rate dipped to 4.75%, down from 4.85% in February, and the lowest percentage since April 2018. At the same time, average time to close for all loans dropped to 40 days, marking the shortest closing period since February 2015.
Overall, Millennials closed all loans two days faster month-over-month and the trend was consistent for both refinances and purchases. On average, refinances took 42 days to close in March, 11 days faster than the month prior, while time to close a purchase shrunk from 45 to 39 days.
The decrease in interest rates on all 30-year loans was driven in large part by month-over-month interest changes for 30-year conventional loans, which on average decreased from 4.81% to 4.7%, and VA loans, which fell from 4.47% to 4.36%. FHA loan average interest rates decreased from 4.85% to 4.84% during the same time period.
“Homebuying tends to pick up in the spring and lower interest rates are intensifying this trend among Millennials,” said Joe Tyrrell, executive vice president of strategy and technology at Ellie Mae. “Likewise, lower interest rates are providing increased purchase power to Millennials, allowing them to participate in a very competitive home buying market.”
The Millennial Tracker data echoes findings from the Ellie Mae March Origination Insight Report, which also found a decrease in time to close and a drop in 30-year note interest rates across loans to all borrowers.
For all loans closed by Millennials in March 2019, 68% were Conventional and 28% were FHA, while VA and other loans accounted for 2% and 3% respectively. Among FHA loans, purchases increased to 95% in March, up from 89% the month prior. Alternatively, among Conventional loans, share of purchases fell to 85%, down one percentage point from February.