Gen Z Buyers Are Helping VA Loans Bounce Back in 2025

The youngest generation of Veteran homebuyers is helping the VA loan program bounce back after an uneven last couple of years.

At the halfway point of Fiscal Year 2025, a Veterans United analysis of VA lending data shows:

• Total VA loans are up 45% compared to the first two quarters of Fiscal Year 2024
  
• VA purchase loans are up nearly 10% half-year over half-year
  
• VA refinance loans are up 150% over the same period

Generation Z is playing a leading role in these increases and making their mark on housing markets nationwide.

These young homebuyers and homeowners led all age demographics in half-year over half-year growth, including an eye-popping 459% increase in VA refinance loans. The huge jump in refinance loans likely reflects a wave of first-time homeowners capitalizing on an improved rate environment compared to just a year or two ago.

Here’s a look at the overall numbers for the first half of FY25 compared to the first half of FY24:

“This kind of momentum shows just how powerful the VA loan benefit continues to be,” said Chris Birk, vice president of mortgage insight at Veterans United Home Loans. “Young Veterans are stepping into the market with confidence, and this program is helping them overcome hurdles that might otherwise sideline their homebuying journey.”

For 2024, total VA loans were up about 4% from the year prior. But VA purchase loans last year dipped nearly 7% year over year.

Gen Z Veterans Outpace Civilian Buyers

To be sure, Millennial Veterans and service members remain the dominant force in VA lending.

Now the nation’s largest generation, Millennials have accounted for nearly half (48%) of all VA purchase loans and more than 1-in-3 (35%) of all VA loans since FY19, according to VA data.

But Gen Z is certainly on the rise. They were the only age demographic to experience a year-over-year increase in VA purchase loans last year. Gen Z Veterans also hit an all-time high last year for VA purchase market share (12%), which was more than three times their slice from just three years prior.

For comparison, Gen Z buyers comprised only 3% of the overall mortgage market last year, according to the National Association of Realtors.

Foundation for First-Time Buyers

These gains come as Gen Z Veterans start to define their economic footprint, potentially reshaping housing demand in the process. This digital-first generation is leveraging VA loans to sidestep traditional barriers to homeownership, including high down payments and tightening credit standards.

Veterans United research shows these younger buyers are most concentrated in and around the nation’s largest military communities, such as Virginia Beach, San Antonio and Colorado Springs. In many cases, their VA loan becomes the bridge between military service and civilian life, serving as a path to building equity, stability and long-term financial footing right where their careers began.

“We’ve seen Gen Z Veterans embrace the VA loan program in record numbers,” Birk said. “They’re savvy, mission-oriented buyers who understand the value of a 0% down mortgage, especially in today’s market. This generation is on the cusp of playing a major role in shaping the housing economy of the future.”

The flexibility and buying power of the VA loan make it a particularly strong match for younger borrowers navigating today’s affordability challenges. With no down payment, no mortgage insurance and more lenient credit guidelines, the program offers a unique foundation for first-time buyers eager to put down roots.