A new report written by Down Payment Resource shows that in the month of January, 65% of first-time homebuyers bought their homes with a down payment of 6% or less. This is largely due to low down payment programs.
The trend continued for all buyers receiving mortgages, with 62% making a down payment of under 20%. This was noted to be consistent with December numbers.
An article by DS News points to the new wave of millennial homebuyers:
“It seems that the long-awaited influx of millennial home buyers is beginning. Ellie Mae reported that mortgages to millennial borrowers for new home purchases continued their ascent in January, accounting for 84 percent of closed loans.”
FHA loans remained popular among millennials purchasing homes in January, making up 35% of all loans closed. Showing that low down payment programs are attractive to young home buyers. Ellie Mae’s Executive Vice President of Corporate Strategy Joe Tyrrell gave some insight into why:
“It is not surprising to see Millennial borrowers leverage FHA loans because they typically offer lower down payments and lower average FICO score requirements than conventional loans. Across the board, we’re continuing to see strong interest in homeownership from this younger generation.”
If you are one of the many millennials who is debating a home purchase this year, let’s get together to help you understand your options and set you on the path to preapproval.
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