The average millennial borrower credit score on closed loans varied greatly from city-to-city in May, according to the latest Ellie Mae Millennial Tracker™.
Average credit scores for borrowers in the top housing markets for this generation (based on percentage of Millennial loans closed) significantly differed across the country, with averages ranging from 662 in Madisonville, Ky. to 757 in San Francisco, Ca. The millennial city-specific FICOs are not representative of a state’s entire population.
“You would expect to see higher average FICO scores in the largest coastal metropolitan cities where loan amounts are higher, which we do see in areas such as San Francisco (757), Los Angeles (745), Boston (701) and Miami (722); however, there are some surprisingly high numbers in more rural areas, such as Mitchell, S.D. where the average FICO for millennials was 735 in May, higher than Boston or Miami,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “Our Borrower Insights Survey recently found that many millennials have a strong misperception about needing a perfect credit score to qualify for a home loan,” added Tyrrell.
Overall, the average FICO score for all closed loans to Millennials in May held steady for the third month in a row at 721, the lowest average for millennial borrowers since April 2017. Comparatively, Ellie Mae’s latest Origination Insight Report showed that the average FICO score for borrowers of all ages who closed loans in May was 724, one point up from 723 in April.
Highlighted Averages on All Closed Loans by Millennials in Top DMAs: May 2018 | ||||
Top DMA City | Average FICO Score (May 2018) | Percentage of Closed Loans to Millennials (May 2018) | ||
Mount Pleasant, Texas | 689 | 79% | ||
Mitchell, S.D. | 735 | 76% | ||
Madisonville, Ky. | 662 | 71% | ||
Indiana, Pa. | 733 | 70% | ||
Gloversville, N.Y. | 701 | 67% | ||
Additional key findings from the May 2018 Ellie Mae Millennial Tracker include:
· Purchases made up 90% of all closed loans to millennials, up from 89% in April; refinances represented 9%, down from 10% the month prior, with 1% remaining unspecified month-over-month.
· Conventional loans remained the most popular loan product for millennial borrowers at 68% of total closed loans in May. FHA loans accounted for 28% of closed loans. During this period, VA loans represented just 2% of all closed loans. The remaining 3% were undisclosed.
· Millennial males were listed as the primary borrower on 62% of closed loans, while females were listed on 32% and 7% were unspecified. For comparison, in May 2017, males were listed as the primary borrower on 65% of loans, females at 32% and 3% were unspecified.
· The average age of millennial borrowers held steady from the month prior at 29.9.
