With interest rates slashed and U.S. homeowners looking to save on their mortgages as the coronavirus crisis took hold, mortgage refinancing activity among millennials hit a record high this past March, according to the latest Ellie Mae Millennial Tracker report.
The refinance share for all millennial borrowers during the month was 38%, up four percentage points from February 2020. It was the third straight month that the refi share for millennials increased, reaching its highest level since Ellie Mae started to track the metric in 2016.
According to Joe Tyrrell, Ellie Mae’s chief operating officer, many savvy millennial homeowners clearly took advantage when the Federal Reserve trimmed its target interest rate to near zero. The average interest rate for all 30-year mortgages closed by millennials fell from 3.86% this past February to 3.66% in March — the lowest average rate since May 2016.
Older millennials, those between 30 and 40 years old, took advantage of the low rates in spades. The March refi share for older millennials was 46%, up from 41% in February and more than double the share for younger millennials (21%) in March.
Tyrrell noted that the average time to close a refinance among the millennial generation decreased from 38 to 36 month over month. In fact, the average time to close for all loans to millennial borrowers also fell by two days between February and March, from 41 to 39.
“[More millennials refinancing] follows a trend we’ve seen in our data over the last 12 months, but what’s more surprising is time-to-close numbers decreasing despite the surge in refinance activity and the limitations lenders are facing as a result of COVID-19,” Tyrrell said.
“Technology is now more important than ever and lenders investing in the solutions necessary to manage their pipelines virtually are seeing success.”
