Home buying trends: Millennials are more conventional than you might think
Conventional loans among Millennials hit two-year high
Millennial home buyers seem to have pretty good credit. According to new data, not only are their credit scores rising, but they’re also qualifying for more conventional loans – products that are traditionally more difficult to get without great credit.
Getting more conventional
According to the most recent Millennial Tracker from Ellie Mae, Millennials are increasingly choosing conventional loans over FHA, VA or other loan options. In fact, conventional loans made up 67 percent of all Millennial closed loans in January – the highest share in two years.
FHA loans only accounted for 32 percent of all Millennial loans for the month. Joe Tyrell, Ellie Mae executive vice president of corporate strategy, said this trend has been gaining speed.
“Historically we have seen Millennials look to FHA programs to help address their home buying needs, but in the past two months, FHA loans have represented less than 30 percent of the total loans for Millennials,” Tyrell said. “We view this as an indication that more Millennials are qualifying for conventional mortgages.”
Other Millennial home buying trends
Refinance loans were also up among Millennials in January. Refis accounted for 18 percent of all loans for the month – up from the 15 percent share seen since October. Millennial FICO scores rose too, increasing from 722 to 723 for the month.
The top three spots for female Millennial buyers were all in Wisconsin: La Crosse-Onalaska, St. Cloud and Green Bay. For male Millennials, it was Fairmont, West Virginia; Owensboro, Kentucky; and Macon, Georgia.
Women were more likely to use FHA loans. Thirty-two percent of women chose FHA financing compared to 27 percent of men.
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