Gen Z home shoppers are planning significantly smaller downpayments than older generations, according to a LendingTree analysis of mortgage purchase inquiries submitted to its platform from Jan. 1, 2025, to May 31, 2026. The cohort had a median planned downpayment of $41,250, or 10 percent of the planned purchase price, the lowest of any generation and a quarter below the overall median of $55,000.
Millennials, by contrast, planned a 15 percent downpayment, or about $65,000 at the median planned purchase amount. The pattern is consistent with years of inflation, elevated rates and home-price growth eating into what first-time buyers can save.
The short version:
- Gen Z median planned downpayment: $41,250, or 10 percent of planned purchase price.
- Millennial median planned downpayment: about $65,000, or 15 percent.
- Overall median planned downpayment: $55,000.
- 2,746 downpayment assistance programs were active in Q2 2026, per Down Payment Resource.
- 234 of those programs are grants that do not require repayment.
Background on the assistance landscape
The universe of assistance programs keeps expanding. In Q2 2026, Down Payment Resource counted 2,746 active programs designed to reduce loan-to-value ratios or cover closing costs. Of those, 234 are grants from government or other sources that do not require repayment. The rest typically carry repayment stipulations, often structured as silent second mortgages or forgivable loans.
The common misconception is that these programs are only for low-income buyers. Down Payment Resource's data say otherwise. A clear majority of programs are available to households earning more than $100,000 a year, and several hundred programs carry no income limit. The agency line: this is broader than the stereotype.
Our analysis
A 10 percent planned downpayment is the new normal for the youngest cohort of buyers. That is not a story about preference. It is a story about arithmetic. When prices rose faster than wages and rates reset higher, the path to a larger downpayment lengthened. Buyers adjusted by lowering the target, by using assistance, or by walking away.
For investors and brokers, the relevant shift is in the buyer pipeline. A larger share of Gen Z transactions will close with non-conventional downpayment structures: low-down conventional, FHA, grant stacking, or co-borrower arrangements. Underwriting tolerances matter more than headline price.
The grant figure is the part to watch. Grants do not require repayment, which means they do not encumber future refinance or sale. As grant volume grows, the friction between buyer and closing drops. That is bullish for transaction counts and bearish for the average downpayment percentage over time. Fewer dollars per deal are flowing out of the borrower's own savings.
A worked example
Say you are a broker working a Gen Z first-time buyer. A few years ago, the script was the old 20 percent benchmark. Today, that buyer lands closer to 10 percent. A state grant and employer-assisted housing credit can cover a meaningful slice of that gap, plus closing cost assistance. Effective cash to close drops well below the borrower's own savings. The buyer is in. The deal closes. Your fee is the same. The product mix has changed.
The flip side is risk. A buyer with a smaller downpayment has thinner equity at closing. The first few percent of price decline puts them functionally underwater on the new loan. That is where origination conversations about buydowns, ARMs, and rate buydown assistance move from optional to standard.
For investors, this is also a signal on rental demand. A thinner downpayment cohort is a cohort that rents longer by necessity. Multifamily fundamentals benefit on the way in.
What to watch next
Two numbers. The first is the next LendingTree update on planned downpayments by generation; any move upward from the current Gen Z figure would suggest savings rates are catching up. The second is grant program growth quarter over quarter. If the grant count keeps climbing past 234, expect first-time buyer transaction share to push higher and the average downpayment percentage to keep drifting down. In a higher-rate environment, that combination is a quiet tailwind for transaction velocity and a quiet headwind for loan-to-value discipline.
Frequently asked questions
What is Gen Z's median planned downpayment?
According to LendingTree, Gen Z had a median planned downpayment of $41,250, or 10 percent of the planned purchase price, based on mortgage purchase inquiries from Jan. 1, 2025, to May 31, 2026.
How does that compare to millennials?
Millennials had a median planned downpayment of about $65,000, or 15 percent of the planned purchase amount.
How many downpayment assistance programs exist?
Down Payment Resource counted 2,746 active programs in Q2 2026, including 234 grant programs that do not require repayment.
Are downpayment assistance programs only for low-income buyers?
No. Down Payment Resource reports that a majority of programs are open to households earning above $100,000, and 291 programs have no income limit at all.
