According to the latest Ellie Mae Millennial Tracker, refinance activity hit an all-time high in April 2020, besting the previous mark set in March of this year. The historic refinance surge took place as the average interest rate for millennials reached the lowest point since Ellie Mae began tracking the data in January 2016.
Refinance share – the percentage of all loans closed during the month that were refinances – was 55% in April, up from 38% the month prior. Year-over-year, millennial refinance share increased by 40 percentage points. This unprecedented rise in the refinance market happened as the average interest rate on all 30-year loans dipped for the fourth consecutive month down to 3.48%.
Read More: GlobalFintechSeries Interview with Patrick Turiano, Director of Marketing at Paysafe Group
With millennials applying for refinances of their mortgages to lower their monthly payments, the average time to close for this loan purpose increased by three days, from 36 to 39, as lenders faced increased volume. Overall, time to close on all loans increased from an average of 39 days to 40.
“With interest rates reaching historic lows, millennials have the chance to set themselves up for significant savings over the long-term and they have moved quickly to seize this opportunity,” said Joe Tyrrell, chief operating officer at Ellie Mae. “The refinance spike means lenders are managing crowded pipelines, but they are doing so without the ability to meet face-to-face with borrowers because of social distancing. Lenders that invested in virtual solutions like online borrower portals, eClosing and virtual verifications are capitalizing on this trend and turning this historic appetite for refinances into business growth.”
Read More: Strider Announces John Mullen, Former Assistant Director of CIA, Joins Company as Advisor
