Pleasanton, Calif. -- Over the last year, a dramatic drop in interest rates on 30-year notes has led to an active refinance market for millennials. According to the latest Ellie Mae Millennial Tracker, interest rates on all 30-year notes fell from 4.86% in June 2018 to 4.39% in June 2019. This figure marks the lowest average rate for borrowers of this generation since January 2018. Millennials were quick to take advantage of the lower rates and the share of refinances increased from 8% to 14% of all loans closed by members of this generation during the same period.

Among all 30-year loans closed by millennials, interest rates on VA loans had the largest year-over-year decrease, dropping more than half a point from 4.54% to 3.97%. Rates on FHA loans fell from 4.93% to 4.49% while rates on Conventional loans saw a near half-point reduction, from 4.84% to 4.35%.

From June of last year to June 2019, share of refinances among millennials rose in all three major loan categories. Twenty-seven percent of VA loans were refinances this June compared to 18% the year prior. The share of millennials refinancing FHA loans increased from 4% to 6% over the last year and the share of Conventional refinances jumped from 9% to 17%.

“Savvy millennials looking to lock in lower interest rates on their mortgages have helped drive a surge in refinance activity,” said Joe Tyrrell, COO at Ellie Mae. “While the Federal Reserve’s rate cut doesn’t necessarily mean that rates on mortgages will continue to drop, we’ll be keeping a close eye on its impact on both the refinance and overall mortgage market as we do anticipate that it will effect consumer behavior, including millennials who look to lower their payments.”

While shares of FHA and VA loan refinances were up in June 2019 compared to June 2018, the overall share of FHA loans has decreased, and the share of VA loans has remained flat. FHA loans accounted for 27% of all loans closed by millennials in June 2018, but that figure fell to 24% a year later. Shares of VA loans remain unchanged at 2%.

“There is and has been a massive opportunity for lenders to educate potential homeowners on the loan options available to them,” added Tyrrell. “For example, borrowers with lower FICO scores can take advantage of FHA loans to make homeownership a reality, but the overall awareness that this loan type exists needs to increase.”

With an increased investment in technology, time to close has dropped across the board year-over-year. Average time to close on all loans for millennials has dropped two days while average time to close on refinance and purchase loans has dropped four days and one day, respectively.

For more information, visit