Last updated: April 6, 2018

Female, Single Millennials Rising in Homeownership

According to a recent study released by Ellie Mae, more single females from the millennial generation are buying homes than single men. While most borrowers are married men, the single cohort offers what many may consider a surprising result. From the millennial generation, 60% of women that were listed as the primary borrower were single. Conversely for men, only 42% of primary borrowers that were male were listed as single.

Let’s dig a bit deeper into this trend and what it might mean for the mortgage industry.

Who Are the Millennials?

Millennials are the generation that follows Generation X, those that were born at the close of the 20th century. Hence the name millennials. They range from being born in the mid-1980s to the early 2000s. The millennial generation is unique from previous cohorts for several reasons.

First, there was a massive surge in birth rates during their era that mimicked the Baby Boomer generation. As a result, millennials are the largest living generation with over 70 million in the United States. Their impact on the future of the mortgage market cannot be overstated.

This group, also known as Generation Y, is far more tech savvy than previous generations. This means millennial consumers are far more comfortable engaging in online, virtual buying cycles than previous ones. This is true even for home buying. Studies have also shown that millennials are also less interested in real estate location as they are in a comfortable standard of living.

Finally, millennials grew up during a period of significant financial instability. The Great Recession left a significant impact on their sensibilities. Credit accessibility from 2008 onwards has been more regulated and more stringent than in the past. The housing market has a shortage of homes, which has placed high competition on prices.

What Types of Loans are Single Women Seeking?

In a previous article, we examined that on average female millennials have higher credit scores than men. Their average FICO score was 666, compared to 661 for millennial men. The study from Ellie Mae offers even more insight. The FICO score changes when further reduced by only millennials that are applying for a mortgage loan. In this instance, men that are purchasing a home or refinancing one generally have a higher score. On average, men that purchase a home have an average FICO score of 726 and 735 for refinance.

Women, on the other hand, had scores of 721 and 730 respectively.

Millennial men that were listed as the primary borrower of the home loan were approved for $197,820 on average. Millennial women were approved for less on average, $186,567, or a difference of $11,253 less. There is a disparity in the median wages between women and men. This is likely a combination of traditional “female” occupations, such as teachers and nurses, compared to “male” occupations as well as a gap between men’s and women’s compensation for performing similar roles.

Assessing these trends and characteristics, it becomes evident that more millennial men wait for marriage before buying a home where millennial women are more comfortable entering into the mortgage market as a single.

Pacific Union Financial

Pacific Union Financial, LLC is a full-service mortgage lender providing originations and loan servicing across the United States. A privately held direct lender with Fannie Mae, Freddie Mac, and Ginnie Mae approval, we originate loans through our Retail, Wholesale, and Correspondent channels. Let us know how we can help you expand your business.