Average Credit Scores for Millennial Homebuyers Continue to Decrease, November Ellie Mae Millennial Tracker Finds

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Data Shows FHA and VA Credit Scores for Closed Loans Decreased Significantly Year-Over-Year

PLEASANTON, Calif. – January 3, 2018 – To attract a larger pool of potential first-time homebuyers, some lenders are making it easier to get a home loan by lowering their FICO score requirements. The latest Ellie Mae Millennial Tracker™ showed there was a slight decline in average scores for closed loans to Millennials year-over-year. The trend was most pronounced for FHA and VA loans. In November 2016, the average FICO score on a closed FHA refinance loan to a Millennial borrower was 678, but it dropped to 669 in November 2017. Likewise, average FICO scores on closed VA refinance loans decreased from 725 to 710 year-over-year.

The average FICO score for all closed loans to Millennials in November 2016 was 725, while in 2017 it dropped to 723. Comparatively, Ellie Mae’s latest Origination Insight Report showed that the average FICO score for borrowers of all ages who closed loans in November 2016 was 728. It dropped to 722 in November 2017.

With the average credit score dipping, lenders are extending credit to borrowers who may have had no previous access to the housing market,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. “While these scores are still significantly above the levels seen a few years ago, it is encouraging to see increased accessibility, especially as the millennial population continues to pursue home ownership.”

MILLENNIAL TRACKER FICO SCORE HIGHLIGHTS YOY NOVEMBER 2016-2017

Average FICO Score Nov. 2016 Nov. 2017
All Closed Loans 725 723
FHA Purchase 690 683
FHA Refinance 678 669
Conventional Purchase 746 745
Conventional Refinance 751 741
VA Purchase 744 745
VA Refinance 725 710

Conventional loans remained the most popular loan product for Millennial borrowers at 66 percent of total closed loans in November. FHA loans accounted for 30 percent of closed loans for the second month in a row. During this period, VA loans represented just 2 percent of all closed loans. The remaining 3 percent were undisclosed.

Across all loans, the average time to close increased to 44 days, up from 43 days in October. The average time to close FHA loans, however, decreased to 43 days, down from 46 the month prior. Both average days to close conventional loans and VA loans rose, to 43 and 48 days, respectively.

Men continued to make up the majority of primary borrowers, with women making up just one-third (32 percent) of closed loans, which has remained consistent since August. Among women who were listed as the primary borrower, 40 percent identified as married, 59 percent as single and one percent as separated. This is nearly an inverse to male primary borrowers, among which 58 percent were listed as married and 42 percent single.

The top Metropolitan Statistical Areas (MSAs) for Millennials by percentage of mortgage loans closed in November included Toccoa, Ga. (77 percent), Victoria, Texas (76 percent), as well as Aberdeen, S.D. and Casper, Wyo. (both 65 percent).

Ellie Mae® (NYSE:ELLI) is the leading cloud-based platform provider for the mortgage finance industry.

The Ellie Mae Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. It mines data from a robust sampling of approximately 80 percent of all closed mortgages dating back to 2014 that were initiated on Ellie Mae’s Encompass® all-in-one mortgage management solution. Given the size of this sample and Ellie Mae’s market share, it is a strong proxy of Millennial mortgage indicators across the country. Searches can be tailored by borrower geography, age, gender, marital status, FICO score and amortization type.

For more information, visit http://elliemae.com/millennial-tracker.

ABOUT THE ELLIE MAE MILLENNIAL TRACKER

The Ellie Mae Millennial Tracker focuses on Millennial mortgage applications during specific time periods. Ellie Mae defines Millennials as applicants born between the years 1980 and 1999. New data is updated on the first Monday of every month for two months prior.

The Millennial Tracker is a subset of our Origination Insight Report, which details aggregated, anonymized data pulled from Ellie Mae’s Encompass origination platform. Additional information regarding the Origination Insight Report can be found at http://elliemae.com/resources/origination-insight-reports. News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.

About Ellie Mae

Ellie Mae (NYSE:ELLI) is the leading cloud-based platform provider for the mortgage finance industry. Ellie Mae’s technology solutions enable lenders to originate more loans, reduce origination costs, and shorten the time to close, all while ensuring the highest levels of compliance, quality and efficiency. Visit EllieMae.com or call 877.355.4362 to learn more.

PRESS CONTACT

Erica Harvill

Ellie Mae, Inc.
(925) 227-5913
Erica.harvill@elliemae.com

Alexandra Gardell Kreuter

Allison+Partners
(646) 428-0618
EllieMae@allison

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© 2018 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

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