Housing News

Move Over Millennials: Gen Z Now Accounts for One in Five Home Purchases

Gen Z is no longer waiting in the wings of the housing market.

The generation accounted for a record 20% of all rate locks on mortgages to buy a home in the second quarter of 2026, according to the latest ICE Mortgage Monitor. The oldest members of the generation are now nearing 29 years old.

“Gen Z’s rise…is one of the clearest signs yet of a generational handoff in the homebuying market,” Andy Walden, head of mortgage and housing market research at the Intercontinental Exchange (ICE), said in a statement. “Younger buyers are finding ways to become homeowners.”

Their influence is even greater among first-time homebuyers. Gen Z now accounts for nearly one-third of all first-time homebuyer loans and 27% of Federal Housing Administration (FHA) loans.

The numbers offer a striking counterpoint to the idea that younger Americans have been locked out of homeownership by high home prices and elevated mortgage rates.

Here’s what young homebuyers need to know.

Gen Z now accounts for one in five home purchase mortgages

Gen Z reached a major housing milestone in the second quarter of 2026 as more members became homeowners.

The oldest members of Gen Z are approaching 30, an age when many people begin thinking more seriously about buying their first home. The generation is also only beginning to enter its prime homebuying years, suggesting its share of the mortgage market could continue to grow.

Millennials and Gen Z now drive two-thirds of home purchase lending

Gen Z is not reshaping the mortgage market alone. Together, Millennials and Gen Z now make up two-thirds of mortgage volume for home purchases.

As Millennials move deeper into their prime homebuying years and Gen Z ages, younger adults increasingly make up the majority of borrowers purchasing homes.

Baby Boomers, by comparison, accounted for just 11% of purchase mortgage lending in the second quarter. However, some older, wealthier buyers could be purchasing homes in cash.

Gen Z homebuyers are finding new ways to fund down payments

Buying a home still requires money upfront. Younger buyers are increasingly looking beyond their own savings to come up with it.

Personal savings remained the most common source of down payment funds in 2026, used by 71% of homebuyers.

But alternative sources now account for 29% of all purchase down payments, the highest share in seven years.

Among Gen Z buyers, one in five relied on either a family gift or a loan to help make a down payment. About 13% used gift funds, while 8% borrowed money.

“There’s a correct way to document a gift so it doesn’t stall your loan, and a wrong way that does,” said New American Funding Senior Vice President of Strategic Growth and Expansion Mosi Gatling. “Ask before the money moves.”

The numbers suggest that the traditional image of a homebuyer saving every dollar of a down payment alone does not reflect how many younger buyers are purchasing homes today.

Depending on the mortgage program and a buyer’s financial situation, potential sources of down payment funds may include gifts from eligible family members, down payment assistance programs, and loan options with lower down payment requirements.

“Ask about down payment programs before you assume you’re short,” said Gatling. “The buyers making it work aren’t all sitting on savings. They’re stacking resources most people never ask about.”

FHA loans are helping some Gen Z buyers get in the door

Gen Z’s large share of FHA purchase lending offers another clue to how younger buyers are reaching homeownership.

FHA loans can be particularly useful for eligible first-time homebuyers because they may allow for lower down payments starting at just 3.5% of the purchase price. They also offer more flexible credit requirements than some other mortgage options.

For younger buyers who have not had decades to build savings or establish lengthy credit histories, understanding the full range of available mortgage options can be an important part of the homebuying process.

What Gen Z homebuyers can do to get ready to become homeowners

The growing share of Gen Z buyers shows that purchasing a home before age 30 remains possible, even when it’s challenging. The first step is understanding what you can afford and what resources may be available to you.

Getting pre-approved for a mortgage can help establish a realistic price range before you begin shopping. It can also provide a clearer picture of the down payment and closing costs you may need, along with the loan programs that could fit your financial situation.

For buyers struggling to save a traditional 20% down payment, it may also be worth exploring FHA loans, U.S. Department of Veterans Affairs loan (VA) for eligible military borrowers, and down payment assistance programs.

Mosi Gatling NMLS # 557166