Younger homebuyers are gaining ground in the market, despite persisting affordability constraints, a new industry report found.
Gen Z accounted for 20% of purchase rate locks in the second quarter this year, the largest share on record, according to Intercontinental Exchange's July
The generation, whose oldest members turned 29 this year, also represented nearly a third of all first-time home buyer loans and 27% of Federal Housing Administration purchase volume, which displays both its growing presence in the market and reliance on government-backed financing, the report said.
"Gen Z's rise to nearly 20% of rate locks is one of the clearest signs yet of a generational handoff in the homebuying market," said Andy Walden, head of mortgage and housing market research at ICE, in a press release Monday. "Despite facing one of the tougher affordability environments in decades, younger buyers are finding ways to become homeowners."
Affordability hit
Similarly, ICE's Home Price Index accelerated to a 1.3% annual growth rate last month, the highest pace in more than a year, and posted seasonally adjusted monthly gains of 0.29% despite higher mortgage rates. More than 70% of markets were above year-ago price levels, the largest share in over a year, and 91% posted seasonally adjusted gains in June.
But inventory continued to rise, perhaps signaling softer gains in the coming months, ICE said.
The ICE report also found two-thirds of purchase volume in the second quarter came from digitally native Gen Z and millennial homebuyers, while baby boomers accounted for 31% of cash-out refinance activity and 11% of purchase lending.
Baby boomers' debt-to-income ratio on cash-out refinances of about 39% outpaced those of Gen Z and millennials, suggesting some may be stretching their monthly budgets to tap equity gained during the recent increase of home prices, according to the report.
Buyers across all generations increasingly turned to nontraditional down payment sources. While 71% of homebuyers relied on personal savings for their down payment in 2026, alternative nonsavings sources account for 29% of all purchase down payments, the highest share in seven years.
Down payment sourcing varies by generation, as 21% of Gen Z buyers relied on either a family gift or loan to make a down payment, while baby boomers were twice as likely as any other generation to access retirement savings, the report found.
