WASHINGTON–First-time homebuyers are driving a larger share of mortgage activity than ever, representing 58% of agency purchase lending in the first quarter of 2025 — the highest share on record, according to a new report.
“Intercontinental Exchanges Mortgage Monitor report said the rise is happening as higher mortgage rates continue to deter repeat buyers, leaving room for younger buyers, especially Gen Z, to take a bigger share.
“While first-time homebuyers continue to face affordability headwinds, they don’t have the same disincentive to transact as many repeat buyers, who remain locked in the golden handcuffs of relatively low monthly payments on their existing homes,” Andy Walden, head of mortgage and housing market research at ICE, said in a statement to the Mortgage Professional Association (MPA). “Younger homebuyers are picking up market share with lenders this spring.”
Walden also noted that buyers aged 35 and under accounted for over half of all financed home purchases by first-time buyers in Q1, the MPA said.
Additional Findings
“While repeat-buyer activity has dropped sharply, down 31% compared to pre-pandemic years, first-time buyer volume has declined just 19%,” the report stated. “Purchase lending overall accounted for 82% of agency lending in 2023 and nearly three-quarters so far in 2025.”
The report did cite a statement from the Mortgage Bankers Association (MBA) that found despite the spring buying season, purchase applications are still facing headwinds. Conventional and VA applications fell by 6% and 4%, respectively, while FHA purchase applications saw only a slight decline.
Affordability Issues Remain
Affordability remains a key issue. ICE origination data showed that in March, the average down payment for first-time buyers was $49,000, far below the $134,000 average put down by repeat buyers, according to Mortgage Monitor.
First-time buyers using conventional conforming loans typically provided $77,000 in down payments, while those using FHA loans put down significantly less, averaging $16,000. VA borrowers among first-time buyers contributed even lower average down payments, at just under $10,000, the report added.