ICE Mortgage Technology latest Millennial Tracker Report shows that the percentage of purchasing activity leading to closed-ended loans among millennials has increased for the third consecutive month.
In May, 67% of the loans closed by millennials on the Encompass by ICE Mortgage Technology creation platform were in purchases, up from 61% in April 2021 and 51% in March 2021. Shopping accounted for 82% of loans closed by young millennials (borns). between 1991 and 1999), up from 78% in April. For older millennials (millennials born between 1980 and 1990), purchases accounted for 60% of all closed loans, up from 53% in April.
Average FICO scores for millennial borrowers have declined for the fourth straight month. In May, the average FICO scores for this generation of borrowers fell to 732, down from 734 in April and 739 in March.
“We are seeing a strong and competitive purchasing market across the country, especially among millennials,” said Joe Tyrrell, President of ICE Mortgage Technology. “With the easing of FICO score requirements, millennials are taking advantage of the current environment to continue to pursue home ownership.”
May also marked the second consecutive month that the share of purchases by the elderly exceeded the share of refinancing. In May, 60% of loans closed by older millennials were for purchases and 38% for refinancing. Older millennials haven’t closed more purchases than they refinanced since August 2020, when this cohort accounted for 52% of closed loans.
The average age of millennial borrowers is still around 32. In May, the average age of borrowers was unchanged from the April average of 32.4 years.
The average number of days to close a loan for all millennial borrowers dropped to 46 from 48 in April. The number of days to close the refinancing loan decreased from the previous month from 52 in April to 50 in May, while the number of days to close the purchase loan remained unchanged at 44 days.