What Rate Rise? Millennials Forge Ahead With Purchases
Home-buying millennials are forging ahead with purchases, despite increasing interest rates and the market overall tightening, according to Ellie Mae's Millennial TrackerTM for October. Eighty-eight percent of closed loans to millennials were for purchases, which is four percentage points higher than last October. The amount, on average, was $189,686, also an increase from last year.
"Although housing prices and interest rates are still rising at a faster pace in 2018 than they have in previous years, those trends are not yet stopping millennials from purchasing homes and putting down roots," says Joe Tyrell, executive vice president of Corporate Strategy for Ellie Mae.
Sixty-eight percent of loans to millennials were conventional, while 27 percent were FHA, according to the Tracker.
"It is important for lenders to educate millennials on the value of FHA loans that bring lower down payments and can allow these new homebuyers to stretch their dollar a little further, even with rising interest rates," Tyrell says.