Gen Z accounted for 1 in 5 home purchase rate locks in the second quarter of 2026.
It was a record for the generation and the clearest sign yet that the mortgage market’s center of gravity is shifting to younger buyers, according to ICE Mortgage Technology’s July Mortgage Monitor report.
The 20 percent share is up from prior quarters as the oldest members of the generation approach age 29, squarely in their prime homebuying years.
“Gen Z’s rise to nearly 20 percent of rate locks 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 ICE, said in a statement. “Despite facing one of the tougher affordability environments in decades, younger buyers are finding ways to become homeowners.”
Gen Z now represents nearly a third of all first-time homebuyer loans and 27 percent of FHA purchase lending. That reliance on government-backed financing, ICE’s data suggests, reflects the extent of affordability pressure the generation is still absorbing, even as it gains market share.
Because many in Gen Z are still entering their prime homebuying years, ICE expects its market presence to continue growing. Gen Z and Millennials combined now account for two-thirds of all mortgage purchase volume, which ICE frames as the market’s shift toward “digitally native” buyers.
Baby boomers, by contrast, made up just 11 percent of purchase lending in the quarter but 31 percent of cash-out refinance activity.
ICE noted that boomers’ debt-to-income ratios on those refis ran notably higher than those of other generations, a signal that some boomers may be stretching monthly budgets to tap equity built up during the recent price run.
Down payments are getting creative
The report also points to a broader shift in how buyers are funding down payments.
Non-savings sources — gifts, loans, retirement withdrawals — now account for 29 percent of all purchase down payments, the highest share in seven years, even though 71 percent of 2026 buyers still relied primarily on personal savings.
The sourcing splits by generation. One in 5 Gen Z buyers used either a family gift (13 percent) or a loan (8 percent) to cover their down payment. Baby boomers were twice as likely as any other generation to tap retirement savings.
Home prices, meanwhile, are reaccelerating.
The ICE Home Price Index rose 1.3 percent annually in June, its strongest reading in more than a year, while seasonally adjusted monthly gains held steady at 0.29 percent even as mortgage rates remained elevated.
Seventy-two percent of markets are now above year-ago price levels — the largest share in over a year — and 91 percent posted seasonally adjusted monthly gains in June.
That reacceleration comes with a caveat: Inventory has continued to build, which ICE says could soften price gains in coming months.
What this means for agents and lenders
For real estate agents and lenders working with younger buyers, the data underscores that FHA loans, gift funds, and non-traditional down payment sources aren’t edge cases anymore. They’re increasingly how the largest cohort of new buyers is entering the market.
Loan officers unfamiliar with structuring FHA and gift-fund transactions may find themselves at a disadvantage as Gen Z’s share of purchase volume continues to climb.
“For lenders and servicers, the generational shift in the borrower base is more than a demographic footnote; it’s a competitive inflection point,” Bob Hart, President of ICE Mortgage Technology, said in a statement. “As Gen Z enters the market in force, organizations that have modernized their technology stack and customer engagement capabilities will be far better positioned to serve the next wave of homebuyers.”
