The average value of closed FHAs to millennials in June was $173,381. Most of the mortgages closed in the month were conventional (63%) and the average amount was $205,066. Ninety percent of all closed loans for millennials were for purchase, 10% for refinance.
“Conventional and FHA loans make up the vast majority of loan types among Millennials, and tend to track in cycles. The numbers for June show us that, after a one-year high at 36% of all closed loans in February and March, FHA loans have been steadily decreasing for the past four months,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae.
With conventional loans rising from a 60% share in March to 63% in June, Tyrrell says that this may indicate that millennials are more able to afford a home without government backing, but may also indicate that more education about alternative mortgage types is required.
The San Jose-Sunnyvale-Santa Clara region of California’s Bay Area topped the list of most expensive metros with an average loan amount of $598,606 compared to the average loan amount for the state as a whole ($315,967).
Millennials continued to buy in the affordable Midwest, with Muscatine, IA, (average loan amount: $143,988) Watertown, S.D., ($138,492) Frankfort, Ind.,($125,069) Oshkosh-Neenah, Wis., ($150,751) and Quincy Ill./Mo. ($107,589) making up the top markets overall
More market update:
The share of young American homebuyers purchasing their home with FHA mortgages has slipped to 32% according to Ellie Mae.