Despite soaring housing costs, younger buyers are finding a way in
High home prices and mortgage rates aren't stopping young people from jumping into the real-estate market.
In a housing market that's been dominated by older buyers, younger people are finally jumping in.
Among aspiring homeowners who are applying for a mortgage-rate lock, more than six in 10 are either millennials or Generation Z, according to new data from mortgage data company Intercontinental Exchange $(ICE)$.
Rate locks are an agreement between the buyer and lender that guarantees an interest rate for a set period of time between making an offer on a house and closing on the home. Buyers typically lock in a rate if they are interested in buying but anticipate mortgage rates will rise over the coming days or weeks.
65% of mortgage rates locked in the second quarter were by millennials and Gen Z.
The rate-lock data indicate who's actively looking to buy a home. In the second quarter of this year, Gen Z accounted for 20% of rate locks for purchase mortgages, while millennials represented 45%.
In other words, two-thirds of mortgage applications were made by people under the age of 45 who were looking to buy a home.
Buyers who are members of Gen Z - those born between 1997 and 2012, according to the Pew Research Center - now account for more than a third of first-time home buyers, ICE noted. That's a marked shift: The median age of a first-time home buyer hit 40 in 2025, according to the National Association of Realtors.
Young people in America aren't all throwing in the towel and giving up on homeownership, despite a historic affordability crisis. With the median home price at $403,500 and the 30-year mortgage rate averaging 6.3%, the average homeowner faces a monthly total housing payment of roughly $3,070. That's about 43% of the median household income of $86,000, according to data from the Federal Reserve Bank of Atlanta.
Housing costs over 30% of a household's gross income are considered unaffordable, and are typically far too expensive for the average American.
Yet young people are finding ways to get over that high hurdle.
"The narrative in the industry has largely been [that] young people are priced out and they can't get their foot in the door to homeownership," Andy Walden, head of mortgage- and housing-market research at ICE, told MarketWatch.
But "when we start to look at the loans flowing through our origination channels, we see the opposite - we see Gen Z continuing to come of age into home buying," he added.
Older generations could still be holding back on buying homes because of the persistent "lock-in effect," whereby homeowners don't want to sell because they don't want to give up ultralow 2% mortgage rates in the era of 6% rates, Walden said.
Though younger generations are facing affordability challenges, they may be facing less competition "from some of those older generations that are happily in place that aren't out there shopping in the market right now," he noted.
How, exactly, are younger generations paying for housing in this expensive market?
Like many young people in decades past, many millennials and Gen Z buyers rely on their families to fund their down payment, ICE data showed.
Among Gen Z, 13% used a family gift to cover the down payment on the house, and 8% borrowed the amount, according to the data. About 10% of millennials used family support to fund their down payment.
Gen Z tapped family gifts to fund a down payment on a home at an elevated share relative to other generational cohorts.
A tenth of home buyers indicated that saving for a down payment was the most difficult step in the process of buying a home, according to data from the National Association of Realtors.
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(END) Dow Jones Newswires
July 08, 2026 13:34 ET (17:34 GMT)
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