ICE
reported
that

purchase
mortgages
have
made
up
a
larger
share
of
overall
issuance
in
recent
years.
They
accounted
for
a
record
82%
of
agency
lending
in
2023,
more
than
75%
in
2024
and
nearly
three-quarters
in
Q1
2025.

Similarly,
the

report
found
that

Generation
Z
buyers
made
substantial
gains
in
more
affordable
states.
Gen
Z
was
responsible
for
one
in
four
loans
issued
to
first-time
homebuyers.

And
despite
tightened

affordability,
first-time
buyer
purchase
lending
has
held
up
better
than
activity
among
repeat
buyers
compared
to
2018
and
2019
—
especially
for
conventional
loans
through
the
government-sponsored
enterprises
(GSEs).

“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,”
said

Andy
Walden,
ICE’s
head
of
mortgage
and
housing
market
research.

“Younger
homebuyers
are
picking
up
market
share
with
lenders
this
spring,
with
people
age
35
and
under
accounting
for
more
than
half
of
financed
home
purchases
by
first-time
buyers
in
Q1.”

Gen
Z
participation
is
higher
in
lower-cost
markets
as
market
affordability
challenges
price
them
out
of
coastal
areas.

Indiana,

South
Dakota
and

Kentucky
are
seeing
Gen
Z
shares
top
30%
of
first-time
buyer
activity.

Washington,
D.C.,
has
the
smallest
share
of
Gen
Z
homebuyers
at
7%
of
all
purchase
mortgages
and
11%
of
first-time
buyer
loans.
California
follows
closely
behind,
with
Gen
Z
making
up
8%
of
purchase
mortgage
and
13%
of
first-time
buyer
loans.

As
the
housing
market
has
softened
and

down
payments
remain
a
hurdle,
first-time
buyers
have
increasingly
turned
to


Federal
Housing
Administration
(FHA)
loans.
In
March,
the
average
first-time
buyer
put
down
$49,000
—
far
below
the
$134,000
average
for
repeat
buyers.

Among
first-time
buyers,
those
using
conventional
loans
had
an
average
down
payment
of
$77,000,
while
FHA
borrowers
put
down
only
$16,000
and


U.S.
Department
of
Veterans
Affairs
(VA)
borrowers
were
even
less
at
about
$10,000.

“With
first-time
homebuyers
making
up
an
elevated
share
of
purchase
originations
and
Gen
Z
beginning
to
emerge
in
the
market,
lenders
have
a
powerful
opportunity
to
meet
this
digitally
native
generation
by
offering
intuitive
digital
tools
such
as
online
applications,
self-service
portals,
and
document
upload
capabilities,”
Walden
said.

“At
the
same
time,
capital
markets
participants
should
closely
monitor
how
this
shift
may
influence
loan
performance
and
portfolio
behavior
as
these
buyers
gain
a
stronger
foothold
in
the
housing
market.”

Mortgage
performance
update

Monday’s
release
offered
a
first
look
into
early
2025
mortgage
performance.
ICE
reported
that

delinquency
rates
remain
near
historic
lows
but
are
trending
higher
year
over
year,
propelled
almost
entirely
by
FHA
loans.
ICE
said
that
Southern
states
lead
for
delinquency
rates
of
at
least
90
days.

The
national
delinquency
rate
dropped
by
32
basis
points
(bps)
to
3.21%
in
March
—
the
lowest
figure
since
May
2024
and
only
29
bps
above
the
record
low
of
2.92%
set
in
March
2023.

Foreclosure
activity
is
edging
up,
with
213,000
loans
in
active
foreclosure
at
the
end
of
Q1
2025—
a
4%
rise
from
a
year
ago
and
the
first
annualized
increase
in
nearly
two
years.

VA
foreclosures
surged
54%
after

a
moratorium
ended,
while
FHA
foreclosures
rose
11%.
Foreclosure
starts
climbed
28%
year
over
year,
driven
largely
by
VA
loans,
although
conventional
(+12%)
and
FHA
(+5%)
starts
also
increased.

Foreclosure
sales
remain
historically
low
but
were
up
4%
in
March,
marking
the
first
annualized
increase
in
more
than
a
year
due
to
renewed
VA
activity.

Housing
market
update

After
starting
2025
softer,

mortgage
applications
have
been
up
year
over
year
in
each
of
the
past
13
weeks
through
April
25,
according
to
ICE.
Purchase
applications,
which
spiked
in
the
immediate
aftermath
of

reciprocal
tariff
announcements
in
early
April,
have
softened
alongside
rate
increases.

The
company
observed
higher
inventory
volumes
during
March,
with
the
deficit
of
homes
for
sale
compared
with
pre-pandemic
averages
(2017-2019)
falling
by
20%.
New
listings
were
up
10%
year
over
year
in
March,
falling
only
12%
shy
of
their
2017-2019
averages.

Nearly
one-third
of
major
markets
are
back
to
pre-pandemic
inventory
levels.
The
largest
surpluses
are
in
Lakeland,
Florida;

Denver;
and
Colorado
Springs,
which
have
about
75%
more
homes
for
sale
than
they
averaged
during
the
spring
homebuying
seasons
of
2017-2019.

Conversely,
the
steepest
shortages
are
in
the
Northeast.
A
handful
of
major
markets
there,
including
Hartford,
Connecticut;
New
Haven,
Connecticut;
Albany,
New
York;
and
Rochester,
New
York,
still
running
20%
to
30%
below
normal.