It's been a long time coming, but Millennials and Gen Zers are finally asserting themselves in the housing market. Two-thirds of purchase mortgages (as opposed to refinances) originated in the second quarter of 2026 (Q2/26) went to people in those age groups, meaning those aged under 45 years.
That's a finding of the Intercontinental Exchange (ICE) July Mortgage Monitor report, published on Monday. For years, younger folks seemed excluded from homeownership, but — just maybe — this could be the start of a normalizing of the residential property market.
Another finding is that borrowers of all ages are having to get more creative about getting their mortgages approved. During Q2/26, 29% of borrowers used funds other than their personal savings for their down payments. That's a seven-year high.
Gen Z Mortgages
Are people approaching middle age really in their first flush of youth? Maybe not.
But those who are definitively young are buying homes, too. Gen Zers (now ages 14-29) accounted for close to 20% of all the new mortgages created in the second quarter, according to ICE. And they took over 27% of new FHA loans, 19% of VA loans, and 17% of conventional mortgages.
"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 statement. "Despite facing one of the tougher affordability environments in decades, younger buyers are finding ways to become homeowners."
There are implications here for mortgage lenders. Gen Zers are totally digital natives, and companies will have to work to meet their online technology expectations.
Gen Z and Credit Scores
The average Gen Z borrower locking a rate in Q2/26 had a credit score of 722. That sounds fantastic. But it isn't compared to other age groups.
Here are average scores for borrowers that quarter by generation:
- Gen Z — 722
- Millennials (age 30-45) — 734
- Gen X (age 46-61) — 736
- Boomers (age 62-80) — 754
- Silent Generation (age 81-98) — 763
Some in Gen Z may have done everything they could to nurture their scores but still fall short of older borrowers. They simply may not have borrowed enough for long enough to engineer the uber-high scores attained by Boomers and members of the Silent Generation.
That's a reason to double down rather than give up. Borrowers pay significantly higher mortgage rates if they have lower credit scores. And that can add tens or hundreds of thousands of dollars to interest costs over the life of a 30-year mortgage.
ICE reckons, "borrowers with lower credit scores can face a wider dispersion of interest rate offerings." And it urges those in that position to cast their net wide when shopping around for the best mortgage deal.
We would urge all borrowers to conduct a thorough comparison-shopping exercise, regardless of their age and credit score. The effort online can be negligible while the rewards can be high.
Home Prices Rising More Strongly, Says ICE
Perhaps the increased demand from younger generations is helping home prices rise, despite stubbornly high mortgage rates.
Price growth is far from spectacular by the standards of the last decade, but it's stronger than it's been in more than a year.
Annual home price growth stood at 1.3% in June, according to the ICE Home Price Index. The monthly increase was 0.29% on a seasonally adjusted basis.
June was the fourth month running during which the index has risen. And ICE calculates that, if current trends continue at the same pace, we would see annual rises topping 3% by December.
All the growth has been occurring among single family homes. Unfortunately, condos have been losing value as a nationwide average. Of course, there will be countless exceptions in local markets where condo prices will be rising, but that is far from the case when looking at the country as a whole.
