Gen Z drives record share of home purchases, boosting remodeling demand

Gen Z accounted for 1 in 5 home purchase rate locks in the second quarter of 2026, the largest share on record, and that is likely to show up in the aisles as more first-time buyers arrive with tight budgets and a long project list. Intercontinental Exchange’s July Mortgage Monitor says two-thirds of purchase volume now comes from digitally native Gen Z and Millennial buyers, a mix that favors value-led, step-by-step work over one-time gut renovations.

That shift matters for Home Depot associates in paint, flooring, bath, kitchen and seasonal departments. Buyers entering the market under affordability pressure are more likely to ask about patching, refreshes, storage fixes, lower-cost flooring, and how to stage repairs over time. They are also more likely to lean on digital tools and project planning before they ever reach the store counter, which makes clear product advice and fast comparisons more important than a hard sell on premium upgrades.

Financing is part of the story too. Non-traditional down payment sources made up 29% of all purchase down payments in the report, the highest share in seven years. One in five Gen Z buyers used either a family gift, at 13%, or a loan, at 8%, to cover a down payment, while Baby Boomers were twice as likely as any other generation to tap retirement savings. Gen Z also made up nearly one-third of first-time buyer loans and 27% of FHA purchase mortgages, underscoring how often the youngest buyers are using lower-down-payment and government-backed financing to get in the door.

The housing backdrop has not gotten easier. ICE said its Home Price Index rose 1.3% year over year in June, the strongest annual pace in more than a year, after nearly 70% of major markets posted annual home-price gains in May and almost 90% recorded month-over-month gains. That keeps pressure on wallets even as younger buyers continue to enter the market, which helps explain why many of the projects they bring to Home Depot are likely to be practical, incremental and budget-conscious.

Home Depot has already been building around that kind of customer behavior. On January 11, 2026, the company and Google Cloud announced agentic AI tools meant to help homeowners and pros move projects from how-to to done, and on March 18 Home Depot said it was expanding its Pro digital experience with project management and AI features for renovators, remodelers and builders. The company also said first-quarter fiscal 2026 sales reached $41.8 billion, up 4.8% year over year, with comparable sales up 0.6%, suggesting demand was holding up even as customers stayed choosier about what they bought and when.