NEW YORK — Generation Z accounted for a record share of home purchase mortgage activity during the second quarter while home prices continued to strengthen, even as serious mortgage delinquencies reached their highest level since the pandemic, according to a report by HousingWire citing new data from Intercontinental Exchange (ICE).
The July 2026 ICE Mortgage Monitor found that Gen Z borrowers represented 20% of all home purchase rate locks during the quarter, the highest share on record. The generation also accounted for nearly one-third of first-time homebuyer mortgages and 27% of mortgages insured by the Federal Housing Administration.
“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,” Andy Walden said in a statement reported by HousingWire. “Despite facing one of the tougher affordability environments in decades, younger buyers are finding ways to become homeowners.”
Nearly Two-Thirds of Volume
The report said Gen Z and Millennials now account for nearly two-thirds of all purchase mortgage lending in 2026, underscoring the growing influence of younger borrowers on the housing market.
In contrast, Baby Boomers represented just 11% of purchase mortgage lending but accounted for 31% of cash-out refinance activity. ICE said Boomers also posted higher debt-to-income ratios on cash-out refinances than other generations, suggesting many are tapping accumulated home equity despite stretching household budgets.
The report found affordability pressures continue to influence how buyers finance down payments. While 71% of purchasers relied on personal savings, 29% used other sources such as family gifts, loans or retirement savings, the highest proportion in seven years.
Among Gen Z borrowers, 13% reported using family gifts and 8% relied on loans to help fund their down payments.
A Generational Shift
“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 said in the report. He added that lenders investing in modern technology and customer engagement tools will be better positioned to serve younger borrowers.
HousingWire reported that home prices also continued to gain momentum. ICE’s Home Price Index showed annual home price appreciation accelerated for a fourth consecutive month to 1.3% in June, the strongest annual increase in more than a year. On a seasonally adjusted basis, prices rose 0.29% during the month despite elevated mortgage rates.
Price Gains Continue
According to the report:
- 72% of housing markets posted annual price gains, the largest share in more than a year
- 91% recorded seasonally adjusted monthly increases in June.
- Nearly 87% of markets are now experiencing accelerating price growth, putting annual appreciation on pace to exceed 3% by year-end if current trends continue.
Single-family homes continued to outperform condominiums, with single-family home prices rising 1.6% from a year earlier while condominium prices declined 0.8%.
Metropolitan Area Breakdown
Among major metropolitan areas:
- Rochester, N.Y. recorded the strongest annual home price growth at 7.3%, followed by Hartford and Bridgeport at 6.2% each.
- Price appreciation was strongest across parts of the South and Midwest, including Louisville, Miami, Jacksonville, Knoxville, Tampa and Memphis, while markets in Southern California remained largely flat. Home prices also declined modestly in Honolulu and Denver.
Despite improving prices, ICE reported that housing inventory continues to rise, a trend that could moderate future appreciation.
The report also pointed to signs of increasing mortgage stress.
Increase in Delinquencies
The national mortgage delinquency rate increased 15 basis points to 3.5% in May, although ICE attributed much of that increase to a calendar effect because the final day of the month fell on a Sunday, delaying the posting of scheduled mortgage payments until June.
More concerning, HousingWire reported, was a sharp rise in serious mortgage distress. The number of loans at least 90 days delinquent or already in foreclosure increased by 185,000 compared with a year earlier, marking the largest annual increase since the pandemic-related surge in 2020.
Where Deterioration is Concentrated
ICE said the deterioration remains concentrated among FHA-insured mortgages. The share of FHA loans that were seriously delinquent or in active foreclosure increased 1.9 percentage points from a year earlier, while delinquency rates for U.S. Department of Veterans Affairs-guaranteed loans rose more modestly and conventional mortgage performance remained relatively stable.
Foreclosure starts fell 9% from April to approximately 33,000 in May, the lowest monthly total since November 2025, although they remained 19% higher than a year earlier. Active foreclosure inventory climbed to roughly 280,000 loans, up 34% from May 2025 and the highest level in six years after increasing in nine of the previous 10 months.
Newer Mortgages Growing Share of Foreclosures
The report also found that mortgages originated in 2022 or later now represent a growing share of foreclosure activity, accounting for 39% of foreclosure starts, 34% of active foreclosure inventory and 43% of foreclosure sales. ICE said borrowers who purchased homes during the higher interest-rate environment and have experienced limited home price appreciation are becoming an increasing share of distressed homeowners.
